Using Payroll in FreeAgent RTI Ready

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1 Using Payroll in FreeAgent RTI Ready Set up employees as users to enable FreeAgent to complete your payroll. RTI stands for Real Time information and it s the new way to report wages, salaries, PAYE and National Insurance to HMRC. Traditionally PAYE data would be submitted at the end of the tax year, but the new changes require data to be submitted to HMRC online whenever employees are paid. Before you get started on setting up Users and Running Payroll ensure that your Company Details are correct within Settings and add your PAYE Reference and Accounts Office Reference Numbers. For Limited Companies you also need to add your Corporation Tax Reference or if you are a Sole Trader, Partnership/LLP you also need to add your Self- Assessment Unique Tax Reference. Add an employee as a User 1. Firstly click on the Settings menu in the top right hand corner of your screen 2. Then click on the Users menu 1 2 1

2 3. Next click on New User 4. Add in the employee details. An address must be added. 5. Choose their role/position in the company from the drop down list Set Permissions by dragging the scroll bar. It can be set so the member of staff has no access to FreeAgent. 7. You can also record Mileage if you wish to. 6 Create Payroll Profiles Payroll profiles contain all of the information about an individual s monthly pay, deductions, pension contributions and the starting/leaving dates required to file your payroll online with HMRC. 1. From the My Money menu choose Payroll then select the tax year 2013/14 If you have a Sole Trader, Partnership, LLP FreeAgent account, payroll will only be available if you ve added any employees as users in account (see above). 2. If you have not already set up a Payroll Profile click on Create Payroll Profile, otherwise select an Employee. If you are a Company Director, and the company pays you a salary, you will also need to set up your own payroll profile. 2

3 3. Complete the Payroll profile for the employee Employee Details enter personal details for the employee including their National Insurance Number, you will only need to enter a passport number if you ve collected this as part of any checks you ve made as to whether the employee is entitled to work in the UK. Some information may already have been filled in by FreeAgent because you ve already entered it in the employee s user profile. 3

4 Partner Details enter partner s details if the employee is claiming or planning to claim Additional Statutory Paternity Pay. 6. Employment Details select if this person is an existing employee or a new employee and then select from the NICs calculated as Director or Employee options. National Insurance contributions are usually calculated as equally monthly payments. Directors have the option to choose to pay their National Insurance cumulatively, so that they pay less at the start of the tax year and more at the end. For new employees enter a start date and whether or not they are paid irregularly. You also need to select from the HMRC Starting Declaration options, which provide information about any other work the employee has undertaken or benefits received during the current tax year. Information about a new employee will be sent to HMRC as part of your next RTI submission after you create their payroll profile. Select an option from Normal Weekly Hours to indicate how many hours a week the employee will work for the business. You can also add an optional unique employee number if you would like HMRC to use this in any correspondence with you. 7. Tax & NI enter a tax code. You should already have received this from HMRC or will find it on the employee s P45. Tax code should only be changed on receipt of a coding notice from HMRC. FreeAgent can handle BR, D0 (D-zero), D1 (D-one), K prefixes (like K495) or L, P, Y or T suffixes (like 810L). Select a National Insurance Category Letter this is also sometimes known as the National Insurance Contribution letter and is the same as the NIC Table Letter shown on a P60. If the employee should be making student loan payments, select yes from Are there applicable Student Loan Deductions?. 4

5 Leaving Date You don t need to add a leaving date when first setting up a payroll profile. This is where to add a leaving date if the employee leaves the company in the future. 9. Monthly Pay Enter details of the employee s monthly/basic pay with any allowances or other payments. 10. Monthly Statutory Pay Enter any other pay the employee is currently receiving such as sick, paternity or maternity payments Monthly Deductions Add any regular monthly deductions. 12. Monthly Pension Contributions Add details of any employer or employer monthly pension contributions. 13. When you are ready Create Payroll Profile. 5

6 Prepare a monthly payroll report Once you have set up at least one payroll profile you see the option to Prepare Month Payroll. This will take you to a payroll review. 1. Choose a date for your pay period this is the date that the company is going to pay its employees. HMRC requires that the RTI submission is made on or before this date. 2. Review and edit payslips to make any adjustments for the current month s payroll. Changes can be applied here to each individuals monthly pay, statutory pay, deductions and pension contributions. Any changes made here will not affect your default payroll profile settings to apply other changes to payslips you need to edit individual payroll profiles. 3. Double-check everything check that you have made any necessary changes to your payroll profiles such as adding employees leaving dates, making changes to tax codes or updating student loan settings. Also, make sure that you have a correct payslip here for each employee who is receiving a payment of salary this month. When you have completed your checks select Run & Report Month Payroll to continue. Deleting a monthly payroll If at any time you want to completely start a monthly payroll again, select the Delete Payroll option. You might want to do this to go back and make changes to individual payroll profiles before running your Month Payroll again. 6

7 Submit your payroll to HMRC (RTI) Once you select Run & Report Month Payroll you have effectively run your payroll and payslips for the month have been created. You now need to submit your PAYE information to HMRC by entering your Government Gateway login details when prompted. You ve run and reported your monthly payroll Once you ve run each payroll you can view payslips by selecting the month and an employee from the Payroll section. 7