Sage Payroll Level 1 – Workbook Solution- ©Osborne Training

Level 1 – Sage Payroll Workbook Solution- ©Osborne Training Rise and Shine Cleaning Services OSBORNE TRAINING

Level 1 – Workbook Solution- ©Osborne Training Contents 1 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: New Employees ..................................................................................................................... 11 Task 5: Processing Payroll ................................................................................................................. 14 Task 6: Processing Monthly Payroll ................................................................................................... 16 Task 7: Discussion .............................................................................................................................. 18

Level 1 – Workbook Solution- ©Osborne Training Introduction: 2 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 This company is a small cleaning company. The working week is Monday to Saturday. They are registered with HMRC and we have the reference number 155/R246. This number should be used any time they are communicating with HMRC. There are 2 cleaners who are paid weekly and the manager is paid monthly by BACS. The company pays the cleaners in cash, but no £50 notes are to be used. There is a savings scheme in place. Monthly staff will pay £25 and weekly staff will pay £5. The staff are paid every Friday for the work that they did in the week. Verity is paid on the last Friday of the month.

Level 1 – Workbook Solution- ©Osborne Training Task 1: Setting Up the Company 3 1. Open Sage Payroll. Under File, choose new company. Enter in the company data as shown below. 2. Click next and finish. Your company will now be set up. th 3. Set the processing date to Friday 10 April. This is done by clicking on the payroll module and selecting change processing date. 4. We can now enter the extra information about the company. Click on the company module and then click on settings. Enter in the tax office name, telephone and fax and the email.

Level 1 – Workbook Solution- ©Osborne Training 4 5. Remaining in the settings window, click on the bank tab and enter in the banking details. 6. Now, enter in that no £50 notes are to be used. Remain in the settings window and click on coinage. Under the heading included in analysis click “No”.

Level 1 – Workbook Solution- ©Osborne Training 7. We now need to enter the payments and deductions. We need to create a pay element for the savings scheme. Remaining in the company module, click on pay elements in the tasks. 5 Click on the deductions tab and click new. Enter in the title “Savings Scheme”, enter the default hours as 1 and the rate as £5. We can change the rate for monthly employees if this occurs. 8. We can now generate reports. Reports are located on the top bar. a. Income tax bandwidths and NI rates are located under legislations. b. Company details are located under company. All completed reports are located at the end of these notes. Task 1 is now complete. Task 2: Entering Employees 1. Begin with entering the details for Verity O’Donnell. Click on the employee module and then choose quick employee. a. Enter in all the information. She is an existing employee. She contributes to the savings scheme, so you will need to change the rate to £25.

Level 1 – Workbook Solution- ©Osborne Training 6 b. Save the information and close the window. Double click on her file. Under the employment tab, enter her as full-time under employment type. c. Click on salary and enter her hours for the month. This employee is completed. 2. Now enter the information for Teresa Smithe

Level 1 – Workbook Solution- ©Osborne Training a. She is an existing employee, but she is paid hourly, so no salary will be entered on this screen. She also has an NI category of C, this means that she has reached the 7 pension age and does not have to pay NI contributions, only the company must. b. She also pays in to the savings scheme, but the rate will be at £5. c. Save the file and close the window. Click on her file to enter further information. i. Enter her as part-time under employment type. ii. Enter her hours under the salary button. iii. Enter her hourly rate under the pay elements button. Leave the hours blank, but enter the rate of £10.

Level 1 – Workbook Solution- ©Osborne Training 8 This employee is completed. 3. Now enter in the information, hours and pay elements for Peony James.

Level 1 – Workbook Solution- ©Osborne Training 9 a. You will need to create a new pay element for her overtime. This is done by clicking on her file and entering a new pay element in the employment tab. b. Enter in her employment type and hours to complete this record.

Level 1 – Workbook Solution- ©Osborne Training 4. You can now print off al reports. All reports are under the employee option. 10 This task is now complete. Task 3: Processing Payroll 1. Highlight Teresa Smithe and Peony James. 2. Click on the payroll module. Select enter payments. 3. Enter the hours and click save. 4. We now must print off our pre-update reports. Click on this option in the tasks bar and select payroll summary(ies) and payslips (Laser). 5. Now click on update records

Level 1 – Workbook Solution- ©Osborne Training 6. Ensure you backup before continuing. 7. Submit the FPS to HMRC. 11 This task is now completed. Task 4: New Employees 1. Enter in the details for the 2 new employees as before.

Level 1 – Workbook Solution- ©Osborne Training 12

Level 1 – Workbook Solution- ©Osborne Training 13

Level 1 – Workbook Solution- ©Osborne Training 14 2. Highlight both Jason and Camilla. Click on reports, select employees and select employee details to print off the reports for Camilla and Jason. This task is now completed. Task 5: Processing Payroll th 1. Change the processing date to the 17 April 2015. 2. Highlight all staff except for Verity. 3. Now click on enter payments.

Level 1 – Workbook Solution- ©Osborne Training 4. Teresa’s hours have not changed, so simply ensure she is being paid for 16 hours and save. 5. Peony is a leaver and there will be some more payments needed. 15 a. Ensure that she is being paid 38 regular hours and 2 hours of overtime. b. Click on the add payment button. Create a new payment for the arrears pay and the holiday pay.

Level 1 – Workbook Solution- ©Osborne Training 16 6. Enter the hours for Jason and Camilla. 7. Click on pre-update reports. a. Select the payroll summary(ies) b. Print payslips c. Under analysis, click on cash analysis. 8. Update records. 9. Click on Peony’s account and select the employment tab. Click on the leaver. Enter her leave date and print off her plain paper P45. 10. Now you can submit the FPS to HMRC. This task is now completed. Task 6: Processing Monthly Payroll th 1. Change the processing date to the 30 April 2015. 2. Click on Verity’s account and change her tax code to 1005L. 3. Click on the payroll module and select enter payments. a. You will need to add the bonus by creating a new payment.

Level 1 – Workbook Solution- ©Osborne Training 17 4. You now need to print off pre-update reports: a. Print a Payroll Summary(ies) using a ‘landscape’ format, for Month 1 to include Employer’s NIC.

Level 1 – Workbook Solution- ©Osborne Training b. Print a BACS report which includes the total to be paid. c. Print a Payslip for Verity. 18 5. Update her record. 6. Submit the FPS. Task 7: Discussion a) What form must be submitted with the FPS to HMRC if a Statutory Payment has been paid Employer Payment Summary (EPS) b) When generating employee records, why is it important to include Employment Status and the Contracted Hours? This is to ensure that HMRC knows which employees are eligible for which benefits. c) How much National Insurance does an employer pay for a 20 year old earning less than £42,385 p.a.? £0 End