Payroll Getting Started
Contents Contents...2 Introduction...3 Summary Screen...3 Importing data manually...4 Setting up the payroll from scratch...5 Setting up employee Pay Days...5 Adding Employees...6 Recording Income and Expenses...7 Entering Payroll Settings...8 Creating Payments and Deductions...10 Payslip Layout...11 Processing the Pay Run...12 Full Payment Submission...15 P32 Report...17 Printing and Emailing Payslips...17 Employer Payment Summary (EPS)...18 P11 Report...19 Linking to Sage One Accounts...19 2
Introduction Sage One Payroll is a browser-based online service for small business owners. It s possible to: Process employee pay online. Make submissions to HM Revenue and Customs (HMRC). Produce payslips. Prepare for Auto Enrolment, and manage employee pension contributions once you ve reached your staging date. 24/7 telephone, email and web support is included at no extra charge. If you re new to Sage One Payroll, this guide will help you to get started quickly. The first thing you see when you log in is the Summary window. If you haven t set up payroll information yet, it gives you setup options. And if payroll is already set up, it gives you a quick look at its current state. Summary Screen The first time you log into Sage One Payroll, the Summary Screen will look like this, and will guide you step-by-step through the process of setting up: First, you need to decide whether you re setting up from scratch, or importing existing data. 3
Importing data manually Follow the steps below to manually import a payroll from another payroll system: 1. Select Import manually (from paper). 2. Follow the simple three step process. 3. When you ve completed all three steps of the wizard, select Submit. Because you have not yet processed pay in the new payroll, you can review and edit the information you have imported. When you begin processing pay in the imported payroll, you no longer have the option of returning to the import wizard to make changes. 4
Setting up the payroll from scratch If you d prefer to set up the payroll from scratch, there are two steps: 1. Set up employee Pay Days 2. Add your Employees to the payroll Setting up employee Pay Days You can choose from four different Pay Day options for your employees, and can use a mix if required: Weekly Monthly 2-weekly 4-weekly 1. Click the relevant Set up Calendar link. 2. Enter the pay calendar details. 3. Click Save. When you ve set up the pay calendar, click the View Pay Calendar button to make sure you re happy with the scheduled pay days. 5
Adding Employees You can license your Sage One Payroll service for: A maximum of 5 employees. A maximum of 10 employees. A maximum of 15 employees. The process for adding employees and checking their status is simple. You can license your Sage One Payroll service for: A maximum of 5 employees. A maximum of 10 employees. A maximum of 15 employees. The process for adding employees and checking their status is simple. 6
Recording Income and Expenses 1. Select Create Employee 2. Enter the employee details see below (mandatory fields are marked with an asterisk): Item Personal Details Contact Details Pay Cycle Contracted Weekly Hours RTI Pay ID Works Number Start Date Finish Date Payment Method Is a Director Previous Tax Details: Starting Basis NI Category Tax Code Leaving Date Week 1/Month 1 Final Pay Period Total Pay to date Description Basic information about the new employee, including their NI number. The employee s postal address, telephone number and e-mail address. The duration of each pay cycle. This can be weekly, two-weekly, four-weekly or monthly. The number of hours the employee is contracted to work per week in this employment. This field is for RTI purposes. A unique employee ID code used in RTI reporting. Sage One Payroll generates one for you if it does not already exist. If the employee already has an RTI Pay ID, make sure to specify it correctly, or RTI reporting problems may occur. The ID can be changed if necessary by contacting Customer Services. The unique code that identifies the employee in their company. The date on which the employee started employment with the company. The date on which the employee finished employment with the company. If you specify a Finish Date, the system treats the employee as a leaver. The method by which the employee receives their pay. Select this checkbox if the employee is a director of the company. National Insurance is calculated differently for a director than that of a normal employee. In the Previous Tax Details section you specify the available details about the employee s previous tax and NI details in the current tax year. The employee s National Insurance category. You must specify this for any new employee. The tax code determines the tax allowances the employee receives. The date on which the employee finished their previous employment. Select this checkbox if the employee s tax is calculated on a Week 1/Month 1 basis. The week or month of the employee s final pay run in their previous employment. The total amount of pay the employee has received in the tax year to date, if any. Total Tax to date The total amount of tax paid by the employee in the tax year to date, as specified on their P45. Employer s PAYE Ref This reference number identifies the employee s previous employer, if any. It is specified on their P45. 3. Select Save 7
You have created a new employee record, and can now move on to check the status of your employee. The next time you view the employee list, you ll see that the new employee is listed. Check the Status column (see below) to see whether further action is needed to make the employee active in the payroll. The employee is now active in the payroll. HMRC is informed of this automatically as part of the relevant Full Payment Submission (FPS). Entering Payroll Settings Once you ve completed the stages above, the next step is to enter some Payroll Settings. These can be accessed by clicking on the Settings cog at the top right hand corner. 8
Once you ve clicked on the Payroll 5/10/15 Settings hyperlink, you ll see the following options: 1. Select Payroll Settings 2. Enter your PAYE Ref 3. Enter your Accounts Office Ref 4. Select your P32/EPS Reporting Frequency 5. Select how you pay HMRC 6. Select Save 9
Creating Payments and Deductions The final step before processing your first pay run is to enter any required payments and deductions. Payments e.g. salary, hourly pay, bonus pay, holiday pay etc. Deductions e.g. gross or net, pensions, student loans, attachments etc. (except tax and NI which are automatically deducted) 1. From Payroll Settings, select Payment & Deduction Settings 2. From the Payments tab, select Create New Payment 3. Enter the details of the new payment and select Save. The new payment will appear in the payment list in the Payments tab. 4. Follow the process above for deductions by accessing the Deductions tab. 10
Payslip Layout You can select one of three available payslip layouts (UK customers only). You don t need any stationery, just plain A4 paper. 1. Go to Settings 2. Select Payroll Settings 3. Select Payslip Settings Congratulations - you are now ready to process your first pay run in four simple steps. 11
Processing the Pay Run You can access the pay run wizard either via the Summary screen, or via the Pay tab. Before processing your first pay run, first ensure that the process date is correct. If it s incorrect, you can change it within the Calendar Settings. The first screen you ll see when you select Process Pay Run is the date confirmation page under stage 1: Get Started. Tip: The rules of RTI (Real Time Information) state that employers need to process their pay run on or before the day they pay their employees; if this is not done a fine may be incurred. Find out more online at gov.uk/government/organisations/hm-revenue-customs 12
1. Confirm the pay date and select Next The next step allows you to record any employee absence that may have taken place e.g. SSP or SMP 2. To record the absence, select Add absence, select the relevant reason and complete the details as required. The next step is to specify how much you are paying the employees. You will notice that the employees you have added are displayed on the left hand side. You re setting up their pay for the first time, therefore to enter their pay, you ll need to select one of the payments you created earlier 3. Hover over the Add Payment button and select the relevant payment type. You can then enter the required value for the payment note this is the gross figure (before tax and NI are taken off). If you need to use a payment that s not already set up in the system, click Add Payment and then choose Add a new payment. 4. You can also add any necessary Deductions at this stage, such as Student Loan or Stakeholder Pension. For more detail on how Sage One Payroll handles pensions and auto enrolment, please consult the section later in this guide. Tip: You can change certain employee tax details from within the Edit Pay window. To do this, click the employee s name. This opens the Edit Tax Details window, where you can adjust the following information: Tax code Week 1/Month 1 NI Category On Trade Dispute Director (this applies to the pay run being edited as well as all subsequent pay runs) Your changes are saved to the employee record, and also apply to subsequent pay runs. 13
Once you are happy with the figures you have entered you get a chance Confirm Pay before you submit the figures to the HMRC. You can also print or view a preview payslip. The total employer cost on the right hand side displays the amount you are paying your staff as well as any other costs to the business such as employers NI. 5. Select Complete Pay Run to proceed to the Full Payment Submission. 14
Full Payment Submission The Full Payment Submission (FPS) is how HMRC knows exactly what you are paying your employees and also what you owe them. It is something that you need to do every time you submit a pay run. If you have a new starter in the business, this is how the HMRC will know they work for you and when employees leave the business HMRC will know this has happened. 1. Ensure you ve clicked Complete Pay Run. 2. The Confirm Pay Values? window appears, prompting you to confirm that you want to submit the FPS and to enter your company details and HMRC gateway credentials. 3. To submit your FPS, click Confirm. 4. When a submission is successful, it appears with a green check mark in the Completed Pay Run window. You can also see the details in the HMRC Real Time Information (RTI) Scheme area of the Summary window. If you need to, to view the XML file, click View FPS Submission. Tip: Once you have completed a pay run, you cannot go back and add an employee onto that pay run. For example if you completed month 8 and then forgot to enter an employee on the system, they could not be added onto month 8. 15
When your pay run has been completed you will be directed to the Completed Pay Run page: The completed pay run page can be accessed anytime by clicking the pay button at the top of the page. You can see in this page if the FPS submission was successful or not. You will see our FPS submission failed because our credentials were incorrect. If we select Resolve Issue we can see the reason why the submission failed (HMRC error 1046). 16
P32 Report You can view what is owing to the HMRC by viewing the P32 report. This shows a breakdown of your total liability due to HMRC for the period, and you can use the values to help you determine whether or not you need to submit an EPS (Employer Payment Summary). 1. Complete the final pay run in the P32 reporting period. 2. From the Completed Pay Run window, select P32 Employer Payment Record. 3. Use your internet browser s Print option to print out the report. Printing and Emailing Payslips To view and print a payslip, select the Pay tab and from the list of processed pay runs, click on the month/week you wish to look at. In the Employee Pay Breakdown you ll see the list of employees that were on the pay run in question. 1. View each payslip individually by clicking the PDF icon to the right of their name, or view all payslips by selecting Export All Payslips. 2. To email a payslip to an employee, you must have entered an email address and a password to the employee record within Sage One Payroll. When the employee receives the email, he or she will be prompted to enter the password in order to view the payslip. Again you can email all payslips to employees by selecting Export All Payslips. 17
Employer Payment Summary (EPS) When your monthly or quarterly P32 payment to HMRC is due, you may also need to make an online submission called an employer payment summary (EPS). The EPS includes supplementary information about your company s tax and NI liability at the end of a pay run, including any statutory payment recovery and compensation values, and any values external to the payroll system that reduce your liability to HMRC. NB: The payment is not automatically sent through Sage One Payroll, so you ll still need to pay HMRC via your usual method. To make an EPS submission to HMRC during the normal course of the tax year, once you ve completed every pay run in the P32 reporting period, follow the steps below. 1. From the Summary window, navigate to the HMRC Real Time Information (RTI) Scheme panel and check the current EPS status. When all the pay runs in the current P32 reporting period are completed, this shows how long you ve got to make your EPS submission, or whether it s overdue. 2. Select Record Payment / EPS and specify the necessary P32 Payment details. 3. Select Next and confirm that the balances specified on this window are correct. 4. Select Next and confirm your company details and your Government Gateway login credentials. 5. Select Submit. Now that the EPS submission is complete, check the current status of the submission in the Summary window > HMRC Real Time Information (RTI) Scheme panel. Once you re happy that this is complete, you can make your payment as normal to HMRC. 18
P11 Report You can view what the employees year-to-date figures is at any point using the P11 report; you can even save this as a PDF and send it to an employee if they request it. 1. To access this report, select the Year End tab, then select Review Employee Pay (P11). You will see a summary of the total pay to date. 2. To the right of each employee s name is a View P11 button. Click this to access the report or select View P11 for all employees. Linking to Sage One Accounts If you subscribe to both Sage One Accounts and Sage One Payroll, to save you time when you pay your employees, their salary information automatically posts to accounts. This also posts the bank payment for the employees net wages and a payment to clear your liability to HMRC. To ensure your accounts are correct, you can choose which current bank account the payments to your employees and HMRC post from in Finance Integration Settings. If you use Sage One Accounts Extra rather than Sage One Accounts, you can choose your bank account in Payroll Integration Settings instead. 1. Select Settings > Payroll Settings > Finance Integration Settings. 2. Choose the required Default Payroll Bank Account and select Save. The next time you pay your employees or record your payment to HMRC, the bank payments automatically post from this bank account. 19
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