Integrated Accounting Systems SAGE (ROI)

Transcription

1 Integrated Accounting Systems SAGE (ROI) Professiona, Practica, Proven IAS Sage ROI Manua 2015.indb 1 17/08/ :53

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3 FOREWORD Foreword This text has been deveoped by Accounting Technicians Ireand for use by students participating in our programme of study and preparing for our examinations based on the new syabus pubished for the Academic Year Whie every effort is made to ensure that the information outined in this text is accurate, Accounting Technicians Ireand cannot accept the responsibiity for ack of, or perceived ack of, information contained herein. The text is intended to be a sufficienty detaied synopsis of the syabus materia (and knowedge eve required thereof) in reation to this modue. Students shoud take particuar note of the weighting attaching to this modue, as ceary outined in the syabus. It is on the basis of this weighting that students shoud prepare their own timetabe for study. iii IAS Sage ROI Manua 2015.indb 3 17/08/ :53

4 Copyright This text is issued by Accounting Technicians Ireand to students taking its examinations. It may not be used in whoe, or in part, for any course of study and/or examination of any other body whatsoever without prior permission in writing from Accounting Technicians Ireand. This pubication, or any part thereof, may not be made avaiabe in any ibrary, and it may not be reproduced, in whoe or in part, stored in a retrieva system or transmitted in any form or by any means photocopying, eectronic, eectrostatic, magnetic, pdf, mechanica, recording or otherwise, without prior permission in writing from Accounting Technicians Ireand, Pearse Street, Dubin 2. Acknowedgement This edition was compied by Ms. Fóa O Grady, MIATI. Fóa is an experienced ecturer on the Accounting Technicians Ireand programme and has been a member of the institute since Referencing For the purposes of consistency, a references to he or she wi be referred to as he in this pubication. No other impication whatsoever is impied from this poicy. iv IAS Sage ROI Manua 2015.indb 4 17/08/ :53

5 Tabe of Contents FOREWORD...III INTEGRATED ACCOUNTING SYSTEMS (IAS)...5 Syabus... 5 Learning Outcomes Linked to Syabus Eements...6 Modue: Integrated Accounting Systems (IAS)...7 THE IAS WORKBOOK... 9 Introduction...9 Using the IAS Workbook...9 Presentation of the IAS manua at a gance...10 The IAS Examination KEY PAYROLL CONCEPTS...13 SAGE MICROPAY (2015)...19 Instaation Guide...19 A Brief Introduction to Sage Micropay...20 Restoring Micropay datasets...24 MUNSTER TV LIMITED...25 Learning Outcomes...25 Case Study...26 Requirements...29 Step-by-Step Guide...30 COSY FURNITURE LIMITED...49 Learning Outcomes...49 Case Study...50 Requirements...53 Step-by-Step Guide IAS Sage ROI Manua 2015.indb 1 17/08/ :53

6 Tabe of Contents IAS Sage ROI KEY ACCOUNTING CONCEPTS...71 SAGE 50 ACCOUNTS...75 Instaation Guide...75 Setting Up Other Sage 50 Accounts Companies...78 To Backup Sage 50 Accounts Datasets...79 To Restore Sage 50 Accounts Datasets...80 A Brief note regarding Sage 50 Accounts...83 HAPPY PETS LIMITED...93 Learning Outcomes...93 Case Study...94 Requirements Step-by-Step Guide BH SHOES LIMITED Learning Outcomes Case Study Requirements Step-by-Step Guide MUNSTER TV LIMITED Learning Outcomes Munster TV Limited (part 1) Case Study (part 1) Requirements Step-by-Step Guide (part 1) Munster TV Limited (part 2) Case Study (part 2) Requirements Step-by-Step Guide (part 2) COSY FURNITURE LIMITED Learning Outcomes Case Study Requirements Step-by-Step Guide IAS Sage ROI Manua 2015.indb 2 17/08/ :53

7 IAS Sage ROI Tabe of Contents SPREADSHEETS AND BUDGETING A Brief Introduction to Microsoft Exce (2010) HAPPY PETS LIMITED Learning Outcomes Case Study Requirements Step-by-Step Guide MUNSTER TV LIMITED Learning Outcomes Case Study Requirements Step-by-Step Guide COSY FURNITURE LTD (PART 1) Learning Outcomes Case Study Requirements Step-by-Step Guide COSY FURNITURE LTD (PART 2) Learning Outcomes Case Study Requirements Step-by-Step Guide ADDITIONAL INFORMATION ABOUT EXCEL Exce and the use of Functions The use of Macros in Exce Data Fitering Using Sparkines INDEX IAS Sage ROI Manua 2015.indb 3 17/08/ :53

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9 INTEGRATED ACCOUNTING SYSTEMS (IAS) Syabus Subject Status Mandatory Termina Exam 100% Modue Pass Mark 70% Learning Modes Pre-requisite: Lectures, Workshops, Onine Tutorias, Sef-Directed Learning Successfu competion of Financia Accounting, Taxation and either Business Management or Law & Ethics Key Objective The key objective of this modue is to faciitate earners in aigning their theoretica accounting education with practica appications used in the workpace. Learners wi acquire a eve of proficiency in payro, accounting and spreadsheet software that wi maximize their contribution to the professiona environment. Key Syabus Eements and Weightings 1. Operation and Maintenance of a Computerised Payro System... 15% 2. Integrated Accounting Systems and Doube Entry... 60% 3. Spreadsheets and Budgeting... 25% Other Resources IAS Sage ROI Manua 2015.indb 5 17/08/ :53

10 INTEGRATED ACCOUNTING SYSTEMS (IAS) IAS Sage ROI LEARNING OUTCOMES LINKED TO SYLLABUS ELEMENTS Operation and Maintenance of a Computerised Payro System (15%) On competion of this aspect of the modue, earners wi have acquired the foowing knowedge, competencies and know-how: - (a) (b) (c) (d) (e) The abiity to enter and edit data on a computerized payro system and to successfuy create a variety of pay eements and deductions incuding Pension contributions and Benefit-in-Kind; The abiity to estabish and edit empoyee records, and update any empoyee information according to Revenue advices; The skis needed to accuratey process timesheet information for a required payro frequency; An understanding of the need for secure data, and be abe to safeguard payro information appropriatey; An abiity to generate accurate and meaningfu payro reports. Integrated Accounting Systems and Doube Entry (60%) On competion of this aspect of the modue, earners wi have acquired the foowing knowedge, competencies and know-how:- (a) (b) (c) (d) (e) The abiity to appy theoretica doube entry bookkeeping knowedge to the practica operation of an integrated accounts package; A thorough understanding of a computerized chart of accounts and the practica skis to effectivey maintain a computerized nomina edger; The practica skis to enter and update a variety of customer, suppier and bank records; The skis and know-how to accuratey process financia accounting transactions for an indicated reporting period and effectivey perform a number of reconciiation exercises; Demonstrate the abiity to generate the financia statements in addition to a wide variety of other accounting reports. Spreadsheets & Budgeting (25%) On competion of this aspect of the modue, earners wi have acquired the foowing knowedge, competencies and know-how:- (a) (b) (c) (d) The abiity to create and manage a spreadsheet/workbook and demonstrate a variety of formatting and presentation skis, The practica skis needed to utiise spreadsheets to cacuate, interpret and anayse data through copying/adding data, inserting functions & formuae, creating budgets and forecasts and other spreadsheet toos, The abiity to iustrate data and visuay enhance a spreadsheet, The abiity to generate meaningfu reports from a spreadsheet program IAS Sage ROI Manua 2015.indb 6 17/08/ :53

11 IAS Sage ROI INTEGRATED ACCOUNTING SYSTEMS (IAS) MODULE: INTEGRATED ACCOUNTING SYSTEMS (IAS) Specific Functiona Knowedge and Competencies Understanding Appication Anaysis OPERATION AND MAINTENANCE OF A COMPUTERISED PAYROLL SOFTWARE (15%) Set up and edit company detais Set up Pay eements, e.g. additions and deductions Entering and edit empoyee detais Entering tax detais received from Revenue i.e. P2C information Operation of emergency, Week 1/Month 1 and cumuative bases Process a eaver in a company i.e. issue of form P45 Process Timesheet information for a given frequency Generate meaningfu Payro reports Safeguard Payro information INTEGRATED ACCOUNTING SYSTEMS AND DOUBLE ENTRY (60%) Operation and maintenance of an integrated accounting system understanding of nomina edger and chart of accounts System set up parameters Posting saary journas from payro reports Creating Customer Records and recording Customer transactions Creating Suppier Records and recording Suppier transactions Creating Bank Records and recording Bank transactions Doube entry bookkeeping accruas, prepayments, depreciation, adjustments IAS Sage ROI Manua 2015.indb 7 17/08/ :53

12 INTEGRATED ACCOUNTING SYSTEMS (IAS) IAS Sage ROI Specific Functiona Knowedge and Competencies Financing Arrangements use of correct nomina codes and journas Understanding Appication Anaysis Periodic recurring journas Debtor and Creditor Reconciiations Bank reconciiations Correction of entries aready made Generate the financia statements and other accounting reports Exporting reports to MS Exce and other spreadsheet packages Inputting budget figures Safeguard Accounting Data EXCEL AND BUDGETING (25%) Entering information into a spreadsheet Managing workbooks Protecting workbooks, worksheets using passwords Abiity to use header/footer, page setup, print area and margins Use of formuae and ogica functions Charts and graphs creating/editing to produce a repica image Consoidating data, pivot tabes and use of macros Conditiona formatting, inserting sparkines, and data sorting/fitering Using SmartArt; inserting textboxes and other objects Creating/modifying a tabe within a spreadsheet IAS Sage ROI Manua 2015.indb 8 17/08/ :53

13 INTEGRATED ACCOUNTING SYSTEMS (IAS) The IAS Workbook This is the Repubic of Ireand Sage 50 Accounts version of the IAS Workbook. Introduction This workbook is specificay designed for the Accounting Technicians Ireand second year exam subject Integrated Accounting Systems (IAS). The key objective of the IAS modue is to provide earners with practica experience of the effective use of standard software packages which are commony encountered in the business word. The intention is that earners wi be enabed to reach a eve of proficiency in the use of these packages that wi render them effective as an Accounting Technician. This workbook provides a soid foundation for students preparing for the IAS assessment by aowing them the opportunity to work progressivey through a variety of practica case studies in the areas of computerised payro, computerised accounting and spreadsheets. The materia in this workbook, combined with the IAS sampe assessment papers (sampe papers are not incuded as part of this workbook, but can be downoaded from the Accounting Technicians Ireand website), is designed to cover a aspects of the IAS course comprehensivey. Using the IAS Workbook To commence work you wi need to have the foowing software instaed on your computer: Sage Micropay 2015 * (Avaiabe for downoad) Sage 50 Accounts * (Avaiabe for downoad) Microsoft Exce (Widey avaiabe, MS Exce 2010 is presented in this manua but candidates shoud be aware that aternative versions e.g. MS Exce 2007, 2013 etc. may be presented by their coeges). * Detais of specific versions to be instaed wi be confirmed by Accounting Technicians Ireand at the commencement of the Academic Year 2015/2016. You shoud note that the manua is prefaced with detaied instaation instructions which wi guide you through instaing Sage Micropay and Sage 50 Accounts; a registration detais and seria numbers etc. are provided in the reevant sections of the workbook. It is important to note that a seria numbers, company names, and activation keys given are for use excusivey with the case studies in this workbook. You are not permitted to use any of this information for any other company or organisation. It is aso important to note that a company and individua names in this workbook, and the IAS sampe assessment papers, are fictiona and any simiarity to actua entities is entirey coincidenta. Students shoud aso note that the information provided is often restricted or kept necessariy brief in order to accommodate an effective teaching process and that a rea word scenario may differ from those scenarios presented within these pages IAS Sage ROI Manua 2015.indb 9 17/08/ :53

14 The IAS Workbook IAS Sage ROI It is crucia that you foow the instaation guideines exacty as provided and ensure that fu administrator access to your workstation is enabed. When instaation is compete you shoud then be abe to work progressivey through the various manua case studies. Presentation of the IAS manua at a gance Key Concepts: A brief review of some of the most reevant concepts is provided for the reader s information; however it shoud be noted that these notes do not purport to be exhaustive or comprehensive and students are advised to review the reevant course textbooks for further detai and guidance. Introduction to the Software: There is a short introduction to the software provided at the commencement of the Payro and Accounts sections of this manua. The purpose of these sections is to introduce the reader to the various modues and functionaity of the software invoved; again it shoud be noted that this introduction focuses on particuar functionaity as reevant to the IAS syabus and students shoud appreciate that the tota capabiity of the software is not fuy reviewed in this manua. Case Studies: The workbook foows the IAS syabus cosey, and each case study wi aow the earner to practice specific skis which can be expanded and buit upon as progression is made through the workbook and associated materia. The case studies are supported by comprehensive step-bystep guides. A soution dataset for each of these case studies is provided on the website for students reference, these datasets can be restored into the reevant software and the recommended method for recording transactions wi be iustrated (i.e. by viewing the data contained in the audit trai or other reevant reports). NB: Pease note that the datasets provided cannot be opened or accessed directy; they must be restored into the particuar software e.g. using the Restore function in Micropay, or Sage 50 Accounts as appicabe. It shoud be further noted that the soution printouts provided in the IAS manua soution booket wi most ikey be sufficient for students to verify that their work is correct. Other Functionaity: The key objective of the IAS workbook is to provide a thorough and practica introduction to computerised software in the accounting environment. It shoud be appreciated that it is not therefore designed to provide in-depth guidance on using Sage 50 Accounts, Sage Micropay or Microsoft Exce. Detaied guidance is provided by the various tutoria data and user guides that accompany the Sage 50 Accounts and Micropay software. Additiona materia incuded with the software incudes user guides, introduction to accounts, printing guides, instaation instructions, tutoria company IAS Sage ROI Manua 2015.indb 10 17/08/ :53

15 IAS Sage ROI The IAS Workbook data, and a wide variety of other data and documentation. There are aso exceent hep functions within the software. It is not the intention or purpose of this workbook to reproduce this information, but it may be usefu to have access to such information whie working through this workbook. In addition, the Accounting Technicians Ireand website provides a variety of materia supporting the IAS modue. A of this materia is avaiabe for downoad from After thorough review of this manua and on accurate competion of the presented case studies, it is intended that students then downoad and attempt the IAS Sampe Papers prepared for the academic period 2015/2016. These sampe papers (supported by setup and soution datasets) are presented as an iustration of the possibe presentation of examinabe materia as determined by the IAS syabus; they afford vauabe practice and preparation, however they shoud not be viewed as a comprehensive presentation of the exact topics and requirements that may appear in the fina Examination. The IAS Examination It is intended that thorough review of the materia in this manua (and associated IAS materias presented by Accounting Technicians Ireand throughout the academic period 2015/2016) wi assist in preparing students for the 2nd Year IAS examination. Pease be aware that you are not aowed to bring this workbook or any other notes into the IAS Examination. Students are permitted to bring the foowing into the IAS exam: pens, penci, eraser, ruer, correction fuid and cacuator. No other materia can be brought into the exam or used during the exam. Mobie phones are specificay banned from the Exam venue. It is permissibe to use the Hep function within Sage Micropay (ROI), Sage 50 Payro (NI), Sage 50 Accounts and MS Exce during the Exam if required. No other software (e.g. training or tutoria software) can be used during the course of the exam. MS Exce shoud ony be accessed to address the specific requirements of the Exam paper and must not be empoyed for any other purpose IAS Sage ROI Manua 2015.indb 11 17/08/ :53

16 The IAS Workbook IAS Sage ROI Bank paper wi be provided for cacuations and students shoud note that a workings shoud be submitted aong with the required printouts; however marks wi be awarded on the basis of the computerised printouts ony. Students shoud refrain from performing any cacuations on their computerised printouts. The duration of the IAS exam is 3.5 hours. Printing can be carried out after the 3.5 hour period, but no changes can be made to your exam after that time. Comprehensive Exam guideines wi be issued by Accounting Technicians Ireand in advance of the IAS exams IAS Sage ROI Manua 2015.indb 12 17/08/ :53

17 THE PAYE SYSTEM COMPUTERISED PAYROLL Key Payro Concepts The PAYE system is a method of tax deduction under which a person s empoyer cacuates the tax due and deducts it each time a payment of wages, saary, etc. is made to an empoyee, and a method of coecting PRSI (Pay-Reated Socia Insurance). An empoyer cacuates the tax due in respect of each pay period by appying the information on the empoyee s certificate of tax credits, against the gross pay (ess superannuation and contributions to a Revenue approved permanent heath benefit scheme) as foows: The standard rate of tax is appied to gross pay, up to the standard rate cut-off point for that week or month Any baance of pay over that amount in that pay period is taxed at the higher rate of tax. The sum of these two figures gives the gross weeky/monthy tax. This gross tax is reduced by tax credits to arrive at the net tax payabe. TAX CREDITS Under the tax credit system an empoyee is entited to tax credits depending on persona circumstances e.g. married person s tax credit, empoyee (PAYE) credit etc. STANDARD RATE CUT-OFF POINT Your standard rate cut-off point is the amount of your persona standard rate tax band. For each pay period, weeky, fortnighty or monthy, you pay tax at the standard rate of tax up to your standard rate cut-off point. Any income over your standard rate cut-off point is taxed at the higher rate. TAX CREDIT CERTIFICATES (P2CS) Tax credit certificates (P2Cs) are issued to every empoyee who makes a caim for tax credits. In addition Revenue aso issues a tax credit certificate to the empoyer. A P2C wi provide detai regarding the Empoyee s Tax credits, Standard Rate Cut-off point, rates of tax, USC Cut-off points and rates of USC. Detais of previous Pay for PAYE and USC cacuations are aso incuded where reevant. EMERGENCY TAX If an empoyer does not hod a Tax Credit Certificate or a P45 from a previous empoyer which shows their tax credits they are required to deduct Emergency Tax. Different rues appy depending on whether or not the empoyee provides an empoyer with his/her PPS Number. THE CUMULATIVE PRINCIPLE Whereby the PAYE due is cacuated on any pay day by reference to: Tota pay to date since the start of the tax year (cumuative pay) Tota accumuated persona tax credits and standard rate cut off point to date since the start of the tax year. As and from 1 January 2012, the deduction of USC operates on a cumuative basis simiar to the manner in which PAYE is deducted IAS Sage ROI Manua 2015.indb 13 17/08/ :53

18 Key Payro Concepts IAS Sage ROI WEEK 1/MONTH 1 BASIS Whereby each week s pay and tax is cacuated independenty without reference to the previous week. Under the week 1/month 1 basis the empoyer is prohibited from making refunds. TEMPORARY BASIS When a new empoyee commences with a P45 from their previous empoyment, the empoyer submits the P45 (Part 3) to Revenue requesting a tax credit certificate for the new empoyee. The tax credit and standard rate cut off point from the P45 shoud be used on a week one basis unti a new tax credit certificate (P2C) is received from Revenue. The USC iabiity wi aso be cacuated on a Week 1 basis, using the standard 2015 USC rates and threshods FORM P45 A Form P45 is a certificate given by an empoyer to an empoyee on cessation of empoyment. This form certifies the empoyee s Pay, Tax and PRSI contributions from the start of the tax year to date of cessation and aso certifies that the deductions have been made in accordance with the instructions given by Revenue. The Form P45 incudes: Date of cessation and commencement (if after 1 January). Detais of Tota Pay The amount of the tax credits and standard rate cut-off point in operation Tax deducted to date of eaving Detais of USC Cut-off points in operation Tota Gross Pay detais for purposes of USC cacuations PRSI deducted to date of eaving and number of insurabe weeks PRSI Cass PENSION CONTRIBUTIONS Empoyed individuas may be a member of a company pension scheme and as such are considered to be in pensionabe empoyment. A company pension scheme is referred to as an Occupationa Pension Scheme to which both Empoyees and Empoyers can contribute. Where the empoyer makes a contribution the amount is not considered to be earnings of the individua. Tax reief is avaiabe on empoyee contributions up to specified imits. PERSONAL RETIREMENT SAVINGS ACCOUNTS (PRSA) A PRSA is a persona retirement savings account, if an empoyee moves to a new empoyment they can take the PRSA with them and the new empoyer can choose to contribute to it. Tax reief on PRSAs is cacuated in the same way as a other pension contributions and is subject to the same imits. RE-IMBURSEMENT OF ALLOWABLE EXPENSES Payments made to the empoyee which are no more than reimbursement of vouched expenses, actuay incurred by the empoyee in performing the duties of the empoyment, shoud not be treated as pay. Expenses which are not treated as pay must not ony be actuay incurred in the performance of the duties of the empoyment but must aso be whoy, excusivey and necessariy so incurred. Expenses IAS Sage ROI Manua 2015.indb 14 17/08/ :53

19 IAS Sage ROI Key Payro Concepts which are incurred by empoyees in traveing to and from the pace of empoyment are not aowabe for tax purposes and any re-imbursement of these expenses must be treated as pay and taxed accordingy. FLAT RATE MOTORING EXPENSES Where empoyees use their private cars for business purposes, re-imbursement by the empoyer in respect of aowabe motoring expenses can be made by way of fat-rate mieage aowances. The expenses that can be paid are any amount not exceeding the schedue of Civi Service rates in current effect (as per the tabe beow). Detaied expense caims must be kept by the submitted by the empoyee and kept by the empoyer. Officia Motor Trave in a caendar year Engine Capacity: Up to 1,200 cc Engine Capacity: 1,201 cc - 1,500 cc Engine Capacity: 1,501 cc and over Up to 6,437km cent cent cent 6,438km and over cent cent cent ROUND SUM EXPENSES Round-sum expenses payments (ump sum expenses payments) whether paid weeky, monthy, yeary or otherwise, which are paid to the empoyee to cover expenses, must be treated as pay and taxed accordingy. CAR ALLOWANCES Where an empoyee is provided with a round sum car aowance, rather than provided with the use of a Company Car, such aowance is iabe to PAYE, PRSI and the USC as an emoument of the Empoyee. Where an empoyee is reimbursed for the expense of business kiometres driven in the empoyee s own car, PAYE, PRSI and USC iabiities do not arise in respect of the amount reimbursed provided the reimbursement is in ine with Revenue guideines for such aowabe expenses. BENEFIT-IN-KIND Benefits which are in a form that cannot be converted into money but which nevertheess confer a benefit on an empoyee, his/her spouse, famiy, dependents or guests are reckonabe for tax. PAYE, PRSI and the USC must be operated by empoyers in respect of the taxabe vaue of most benefits-inkind and other non-cash benefits provided by them for their empoyees. The amounts to be taken into account are referred to as taxabe benefits or notiona pay. The notiona pay iabe to PAYE, PRSI and the USC in respect of benefits must be the best estimate that can reasonaby be made by the empoyer, at the time the benefit is being provided, of the amount chargeabe to tax in respect of the benefit. Except where there are specific statutory vauation rues (e.g. Private Use of Company Cars, Preferentia Loans etc.) the amount of the taxabe benefit that wi be iabe to PAYE, PRSI and the USC wi be the higher of: the expense incurred by the empoyer in connection with the provision of the benefit to the empoyee, or, the vaue reaisabe by the empoyee for the benefit in money or money s worth, ess any amount made good to the empoyer by the empoyee IAS Sage ROI Manua 2015.indb 15 17/08/ :53

20 Key Payro Concepts IAS Sage ROI Benefits commony provided by empoyers can incude Vouchers, Medica Insurance and Life Assurance Premiums, Cub subscriptions, Goods provided to the Empoyee and the transfer of Assets. The reevant payro taxes are charged to the empoyee at the date of receipt of the Benefit by the Empoyee. BENEFIT-IN-KIND THE PRIVATE USE OF COMPANY CARS Where a Company Car is avaiabe for the private use of an empoyee the empoyee is chargeabe to PAYE, PRSI and the USC in respect of that use. Trave to and from work is private use. The vaue of the notiona pay is determined by reference to the Cash Equivaent of the private use of the Company Car; the cash equivaent is cacuated by appying a percentage based on business kiometres to the Origina Market Vaue (OMV) of the vehice suppied. Origina Market Vaue incudes VRT. The Cash Equivaent is reduced by any amount made good by the empoyee direct to the empoyer in respect of any part of the cost of providing or running the car. Annua Business Kiometric Threshods Percentages appicabe to the cacuation of the Cash Equivaent of OMV Cash Equivaent (% of OMV) 24,135 or ess 30% 24,136 to 32,180 24% 32,181 to 40,225 18% 40,226 to 48,270 12% 48,271 and over 6% Once the Cash equivaent vaue of the BIK has been ascertained, the notiona pay shoud be added to the monetary saary payabe to the empoyee in order to cacuate the PAYE, PRSI and USC payabe i.e. the correct payro taxes are cacuated by reference to the tota amount (monetary payments pus notiona pay) Where a Company Car is not avaiabe to the Empoyee for the fu year, adjustments may be necessary. In such a scenario the business kiometric and cash equivaents mentioned above shoud be revised using the foowing fraction of the norma threshods and percentages: Number of days in the tax year that the car is avaiabe for private use 100 x THE UNIVERSAL SOCIAL CHARGE The Universa Socia Charge (USC), which came into effect on 1 January 2011, is a tax payabe on gross income, incuding notiona pay, after any reief for certain trading osses and capita aowances, but before pension contributions. As and from 1 January 2012, the deduction of USC has changed from a week 1 basis (operabe in 2011) to a cumuative basis simiar to the manner in which PAYE is deducted IAS Sage ROI Manua 2015.indb 16 17/08/ :53

21 IAS Sage ROI Key Payro Concepts The Universa Socia Charge is a separate charge to income tax and there are no deductions or credits due against it. It is coected from gross income at the progressive rates. Excess or unused tax credits cannot be used to reduce an individua s iabiity to the Universa Socia Charge. Empoyer/pension providers have responsibiity for operating Universa Socia Charge in reation to payments they make to their empoyees. They deduct and pay the Universa Socia Charge to the Coector Genera on behaf of empoyees. Any expense payments which are ony a recompense for expenses incurred in the performance of duties are not subject to the Universa Socia Charge. Aowances which are in the nature of pay and are part of an individua s gross income are subject to the charge. The standard rates of Universa Socia Charge (for 2015) are: Income Threshods Per Year Per Month Per Week Rate of USC Up to 12,012 Up to 1, Up to % From 12, to 17, inc. From 17, to 70,044 inc. From 1, to 1, inc. From 1, to 5, From to inc. From to inc. In excess of 70,044 In excess of 5, In excess of 1, % However, these standard rates are modified in certain circumstances. Empoyers are not to appy the ower rates or exemption threshod themseves but must instead operate stricty on the figures stated on the P2C issued by Revenue. 3.5% 7% 2015 USC Emergency basis: The 2015 emergency rate of USC is 8%. No cut-off points are aowed. USC must be deducted from a payments at the rate of 8%. The Exempt categories for Universa Socia Charge (2015) are: Where an individua s tota income for a year does not exceed 12,012 A Dept of Socia Protection payments Income aready subjected to DIRT Other income sources (identified by the TCA 1997) The USC is payabe to the Coector Genera at the same time and in the same manner as the deductions under the PAYE system. Statutory redundancy payments are exempt from the charge. Statutory redundancy payments amount to 2 weeks pay per year of service pus a bonus week subject to a maximum payment of 600 per week. In addition, ex-gratia redundancy payments in excess of the statutory redundancy amount are exempt from income tax, and therefore aso the Universa Socia Charge, up to certain imits. These imits are up to 10,160 pus 765 per compete year of service in excess of the statutory redundancy. This basic exemption can be further increased by up to 10,000 if the person is not a member of an occupationa IAS Sage ROI Manua 2015.indb 17 17/08/ :53

22 Key Payro Concepts IAS Sage ROI pension scheme. There is a ifetime tax exempt imit of 200,000 on ex-gratia payments. Any reevant emouments paid which are in excess of these imits are subject to the Universa Socia Charge. Section 778 of the Taxes Consoidation Act 1997 provides that an empoyer s contribution to an approved retirement benefit scheme or a statutory scheme is not treated as a benefit-in-kind for income tax purposes. As the Universa Socia Charge treatment foows the income tax treatment, any empoyer contribution to such schemes wi not be subject to Universa Socia Charge. An empoyer s contribution to an empoyee s PRSA is, however, treated as a benefit-in-kind and chargeabe to both income tax and Universa Socia Charge. Irrespective of this, empoyee contributions are not reieved for Universa Socia Charge purposes. Loca Property Tax (LPT): Loca Property Tax (LPT) is a tax payabe on the market vaue of residentia property and came into effect from 1st Juy LPT is currenty outside the remit of the IAS syabus and any references to LPT within the software can be disregarded IAS Sage ROI Manua 2015.indb 18 17/08/ :53