Sage Payroll Level 1 Workbook Solutions - J&S Fancy Dress

Level 1 – Sage Payroll Workbook Solution- ©Osborne Training J&S Fancy Dress OSBORNE TRAINING

Level 1 – J&S Workbook Solution- ©Osborne Training Contents Introduction: ........................................................................................................................................... 2 Notes on the Scenario ............................................................................................................................. 2 Task 1: Setting up the company. ..................................................................................................... 3 Task 2: Entering Employees ................................................................................................................ 5 Task 3: Processing Payroll ................................................................................................................. 10 Task 4: Entering a New Employee ..................................................................................................... 12 Task 5: Processing Payroll ................................................................................................................. 13 Task 6: Processing Monthly Pay ........................................................................................................ 15 Task 7: Questions and Answers......................................................................................................... 18 1

Level 1 – J&S Workbook Solution- ©Osborne Training Introduction: These notes have been prepared to walk you through the scenario step-by-step. You should practice the scenarios multiple times until you feel comfortable in carrying out these routine transactions. Being a payroll technician is not just about having knowledge of the software, you must also have knowledge of the laws and regulations regarding payroll. Therefore, it is vital that you read the guidance provided by HMRC. They have many helpful guides available to download at the Gov.uk website. Here is a link: https://www.gov.uk/browse/employing-people/payroll HMRC requires that you inform them if you are paying someone before or on the date of payment. If you are late in informing them, you may face penalties. Your company must also use an HMRC approved software programme. Sage Payroll is one of these programmes. Notes on the Scenario The scenario is for tax year 2014/15. You will be processing the pay for the month of April. This is the first month of the tax year. This company is a small fancy dress hire company. It is managed by a husband and wife team and there are two employees. They pay their staff weekly. The pay is in cash and cannot contain any £50 notes or £2 coins. J&S has agreed to set up a savings scheme available for all employees to contribute to. The monthly paid staff will pay £50.00 per month whilst the weekly paid staff will pay £15.00 per week. This is to be treated as a post tax/nic deduction. 2

Level 1 – J&S Workbook Solution- ©Osborne Training Task 1: Setting up the company. 1. Start Sage payroll and enter in the company information. 2. Click next and finish to create your company. th 3. Change the processing date under the payroll module to the 6 April 2014. 4. Click on the company module and then click on settings to enter the remaining information about the company. 5. Firstly, enter in the telephone, fax, email and tax office name under the details tab. 3

Level 1 – J&S Workbook Solution- ©Osborne Training 6. Enter in the bank details under the bank tab. 7. Click on the coinage tab and select no for £50 and £2. 8. It is now time to enter the savings scheme. Under the company module, click pay elements. Choose deductions and click on new. Enter in 2 separate savings schemes one for the monthly and weekly employees. 4

Level 1 – J&S Workbook Solution- ©Osborne Training 9. Your company is now set up. You can now print off your reports. 10. Click on the reports window: a. The company details are located in the company tab. b. The income tax and NI bands are located in the legislation tab. This task is complete Task 2: Entering Employees 1. Enter the data for all four employees as shown below: 5

Level 1 – J&S Workbook Solution- ©Osborne Training a. Click on the employee module. b. Select quick employee. c. Enter the data for Jonathon Bryant. d. Repeat this procedure for the next 3 employees. For the hourly employees you will need to create a pay element for their salary and overtime. This is done by clicking on the company module and pay elements. Enter the default hours as 0 and the rate at Andre Petrova’s rate (this can be changed later). Hit ok for both payments. 6

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Level 1 – J&S Workbook Solution- ©Osborne Training 2. You can now print off the reports for your employees. a. Both reports will be under the employee tab in the reports window. This task is complete. Task 3: Processing Payroll th 1. Change the processing date to the 11 April 2014. 2. Click on both Andre and Tina to highlight them. 3. Then, click on the payroll module and select enter payments. Your entries should appear as below: 10

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Level 1 – J&S Workbook Solution- ©Osborne Training 4. Once you have entered the payments, click on pre-update reports. a. Select payroll summary from the summary tab. b. Select cash analysis from the analysis tab. 5. Highlight both Andre and Tina and click on update records in the payroll tasks window. This task is complete. Task 4: Entering a New Employee 1. Enter David’s employment details as shown below: 2. Highlight David’s file. 3. Click on the reports window and select the employee tab and print off the report with David’s personal details. This task is now completed. 12

Level 1 – J&S Workbook Solution- ©Osborne Training Task 5: Processing Payroll th 1. Change the processing date to the 18 April 2014. 2. Add up David’s hours (34). 3. Highlight Andre’s, Tina’s and David’s file. 4. Click on the payroll module. 5. Select enter payments in the task window. 6. Your payments should appear as follows: 13

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Level 1 – J&S Workbook Solution- ©Osborne Training 7. You can now print of your reports. Click on pre-update reports in the payroll module: a. The payroll summary is located in the summary tab b. The cash analysis is located in the analysis tab c. Payslips are located under payslips. Select the laser option. 8. You can now update the records of the three weekly paid staff. Task 6: Processing Monthly Pay th 1. Change the processing date to the 30 April 2014. 2. You will first need to change the tax code for Jonathon. Click on his file and change the tax code to 625L. 3. Highlight Jonathon and Sheila’s file and process their pay under the payroll module. 15

Level 1 – J&S Workbook Solution- ©Osborne Training 4. You will need to add the holiday pay for Sheila. a. Click on add payment. b. Calculate ¼ of a month’s payment and add it to her pay. 16

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Level 1 – J&S Workbook Solution- ©Osborne Training 5. Print off pre-update reports: a. A BACS report (under the BACS tab) b. A payroll summary (under the summary tab) c. Highlight Sheila’s file. Go back to pre-update reports and print off her payslip. 6. Update both of the files. 7. Click on Sheila’s file. Under the employment tab, mark her down as a leaver. Ensure that you select the plain paper (for e-submission) P45. Select preview to view it. This task is now completed. Task 7: Questions and Answers a) Explain, step by step, how to “Back Up” your work. It is VERY important to back up your pay data when you are working with 'live' data. You should back up at the end of each pay period (week, fortnight or month) and more regularly if you make changes more frequently 18

Level 1 – J&S Workbook Solution- ©Osborne Training The Backup Wizard is started via the File menu.  Open the File menu, and then choose Backup. The Backup Wizard dialog box is displayed. The list on your screen may be empty, or it may contain some entries. If some previous backups are listed, it just means that the program has been used to back up data before. At this point, you can choose what elements to back up. Data Files, RTI Files and Document Files are selected by default. It is only necessary to back up the other types of files if you have created your own reports and templates Click Next. You can now choose a folder and file name for your back-up file. Sage 50 Payroll will probably have suggested a name for you based on your company name and the current week of the tax year. Click Next At this point you have one last chance to go back and change the back-up details (Back), or cancel the back-up procedure altogether (Cancel). b) Explain, step by step, how to “Restore” your work? Click on file and choose restore. Choose a previously backed up file. Click next. Sage Payroll will restore your data from the file you have selected. c) Explain the importance of the processing date in relation to preparing and submitting the payroll data. Under RTI, the deadline for submitting a Full Payment Submission (FPS) is on or before the employees are paid. HMRC use the process or pay date contained in the submission to determine if you've submitted late or not, so it's important that you understand what this means to you and your employees. 19

Level 1 – J&S Workbook Solution- ©Osborne Training Note: From October 2014, HMRC are introducing fines for late submissions, therefore it's important that you understand when to submit your information. For more details, please refer to www.gov.uk/guidance/what-happens-if-you-dont-report-payroll- information-on-time If you submit your FPS after the date the employees receive their pay, you're prompted to select a late reason before you can complete the submission. d) Identify the minimum employee data required in order to process the payroll. Employee information Report this information in a FPS every time you pay an employee. Field Description National The employee’s National Insurance number. Leave blank if you don’t know it, but make Insurance sure you enter their address number Title Surname or family name Forename or given name Second forename or given name Initials Only needed if you don’t know their full forename(s) Date of birth Gender Address Enter their address if they’re a new employee, you don’t know their National Insurance number or the employee’s address has changed 20

Level 1 – J&S Workbook Solution- ©Osborne Training Field Description UK postcode Foreign country Only enter their country of residence if they live outside the UK, Channel Islands or Isle of Man. Also complete the ‘Address’ field Payroll ID You can assign payroll IDs to your employees. The ID must be unique. Use a different one if you re-employ someone (if you do this within the same tax year restart their year-to-date information from ‘£0.00’) or have an employee who has more than one job in the same PAYE scheme. If you reuse a previous payroll ID you’ll create a duplicate record and report payroll incorrectly Payroll ID Only set the payroll ID changed indicator when reporting payroll ID changes and ensure changed both the ‘OLD’ and ‘NEW’ payroll ID is entered. You should not include the original start indicator date. Don’t put ‘Yes’ if you used a different payroll ID when you re-employed someone who left in the same tax year. You should ensure that the year to date financial data cumulates from that on the previous submission. Old payroll ID Only enter their old ID if it’s changed since your last FPS. You mustn’t complete this if for this you are re-employing someone. If you don’t supply it, and they have more than one job in employment your PAYE scheme, your PAYE bill may be calculated incorrectly Irregular Only put ‘Yes’ if the employee isn’t being paid regularly (for example, they’re a casual payment pattern employee or on long-term sick leave) or if you’re not going to pay them for 3 months or indicator more e) Outline the procedure for submitting the payroll data at each pay period 1. Ensure that you are submitting the information before or on the day of payment. 2. Ensure the data is correct before submitting. Ensure that you have updated payments and marked anyone who is leaving. 3. Click on the e-submission module and click on “full payment submission”. 4. Follow the instructions to submit the RTI to HMRC. 5. If you have made any statutory payments, you must also click on the “employer payment summary” button to inform HMRC of the payments you have made. 21