Workbook Solutions for Sage Payroll Level 2 – UKDMA

Sage Payroll Level 2 Workbook Solutions for Sage Payroll Level 2 – UKDMA OSBORNE TRAINING

Copyright ©Osborne Training Contents Task 1: Setting up the company .......................................................................................................... 2 Now we can process the additional information given. ..................................................................... 3 Let’s start with the Earner Savings Plan: ............................................................................................. 3 Now you can deal with the commission: ............................................................................................ 4 Now we can deal with the pension scheme: ...................................................................................... 4 Legislation ........................................................................................................................................... 5 Task 2 ...................................................................................................................................................... 6 Creating Employees ............................................................................................................................ 6 Task 3 .................................................................................................................................................... 10 Processing Payroll ............................................................................................................................. 10 Task 4 .................................................................................................................................................... 13 Advanced Payroll Issues .................................................................................................................... 13 Task 5 .................................................................................................................................................... 15 Sick pay, bonuses and leavers ........................................................................................................... 15 1

Copyright ©Osborne Training Notes for the Scenario There is an earner’s savings plan that will need to be addressed. There is an HMRC charity scheme that will need to be addressed. There is a stakeholder pension scheme in this scenario. Unlike others, the employers will contribute a fixed amount instead of a percentage. There is only overtime available for the part-time administrator. There is a commission of 3%, but only if the sales targets have been met. For workers under 21, you must use NI code M this code is for: Employees who aren't in contracted-out employment and are under 21 years old. This will mean on salaries up to £43,000, the employer usually does not have to pay the NI. This is a motivation for companies to hire younger people. Task 1: Setting up the company Ensure that you have set the processing date for 28/07/2016! 2

Copyright ©Osborne Training Now go to the company module and click on settings. Tick the Small Employers Relief box. Ensure you enter the tax office name in the company details before continuing. Go to the bank tab and enter the banking details. Now we can process the additional information given. Let’s start with the Earner Savings Plan: 1. Go to the company module and click on pay elements. 2. Click on the deduction tab and click on new. 3. Enter the description Earner’s Savings Plan. 4. Enter the default hours as 1 and the rate at £50. 3

Copyright ©Osborne Training Now you can deal with the commission: 1. Click on the payment tab and fill in the description commission. 2. Enter default hours at 0.03 3. Leave the rate blank. This will be the salary of the employee if they are eligible for the commission. Now we can deal with the pension scheme: 1. Click on pension scheme in the company module. 2. Click on edit for the first scheme. 3. Leave the name, but ensure you change the type to stakeholder. 4. Now click on employee. 5. Change fixed amount to percentage. 4

Copyright ©Osborne Training 6. Now click on employer. 7. Enter the fixed amount as £60. 8. We do not know the provider, so leave this blank. Legislation 1. Now click on registration to ensure all the tax info is correct. 2. There is a problem with the pension. The pension should be based on basic salary without any commission. Therefore, you need to click on pay elements and untick the pension option for this payment. 3. Now you need to fill in the e-submission data. a. Click on the e-submission module. b. Click on settings. c. Enter the data. 5

Copyright ©Osborne Training 4. Now enter the contact details Now we need to print off the reports. 1. For the tax bandwidths, click on the company module. Click on reports. Click on legislation and tax bandwidths and rates. 2. In the same screen, click on NI Rates for the report. 3. Click on company in the reports screen and find the company details report. This is the end of task 1. Task 2 Creating Employees 1. Click on the employee module. Click on quick employee. Enter the information for the first employee. st a. The start date will be the 1 July 2016. b. The payment method is cheque. c. He provided a P-45 and his statement was A. He also provided a previous employer reference, the date he left and his tax code. d. Enter the NI number and category A. e. He also contributes to the pension scheme, so select pension 1. f. Ensure to enter the job title. g. Enter the salary. h. He contributes to the savings plan. Click on the deductions area and select the savings plan. 6

Copyright ©Osborne Training 2. Click save. a. You must now enter the contracted hours. i. Double click on the employee. ii. Enter Full-time under employment type. iii. Click on salary. iv. Enter in his contracted hours. 7

Copyright ©Osborne Training This employee is now completed. 3. Now enter in the second employee. a. Starting date is 01/07/2016 b. She is paid by cheque. c. She has provided a P-45 and has made declaration A. d. Enter in the previous employer reference, the date she left, the tax code at leaving, total tax to date, total pay to date and NI number. e. She is under 21, so be sure to use category M. f. Enter that she has a student loan. Use type 1. (HMRC will let you know this). g. Enter that she pays the pension. h. Enter the salary and click save. i. Double click on the employee and enter that she is full-time under the employment tab. j. For the charity scheme, click on pay elements – deduction and create a new deduction. k. Name it Payroll Giving, give it a default hours of 1 and the rate of £10. l. Ensure you click on the PAYE box. m. Enter the hours per week under salary. This employee is now completed. 4. Now enter the third employee a. Enter in all the personal information for David Couchner. b. He has provided a P-46 and given declaration C. This indicates this is his second job. c. Enter in the salary of £21,000 per year. d. In deductions, add the Earner Savings Plan. 8

Copyright ©Osborne Training e. Save and clear. f. Double click on David again to enter further information. g. Enter that he is full time under the personal tab. h. Click on the employment tab. Click on salary and enter the hours he works every week. This employee is now completed. 9

Copyright ©Osborne Training 5. Now enter the fourth employee’s personal details. th a. She has provided a P-46 with statement A. This means it is her only job since the 6 of April. b. Save and close the window. c. You now need to enter the overtime element. Double click on the employee’s name. d. Click on the employment tab and pay elements. e. Create a new payment. Call it overtime. Put the default hours as 1 and the rate at £15. f. This payment is not subject to pension, so deselect Qualifying earning, Pension (main) and Pension (AVC). g. Now click on the salary tab and enter the hours as 18 per week. This employee is now completed. 6. It is now time to print off the reports. a. Click on the reports tab and find employee details – personal. b. Click on employee contracted hours for RTI. c. Click on the company module. Click on reports and find the pension scheme report. This task is now completed. Task 3 Processing Payroll 1. We first need to make the changes to David Couchner’s file. a. Double click on his file. b. Go to pension schemes and click on manage schemes. c. Click on add and choose scheme 1. 10

Copyright ©Osborne Training d. Click on ok. e. You now need to add the payroll giving scheme. f. Click on employment and pay elements. Add the payroll giving scheme under deductions. You need to change the rate to £5. 2. We can now process the payroll. a. Check that the processing date is correct: 28/07/2016. b. Highlight the employees and click on the payroll module. c. In the tasks bar, click enter payments. 11

Copyright ©Osborne Training d. Check that all the elements are correct and hit save. Continue until you come to Anna. e. You must enter the 5 hours of overtime into her calculation. 3. Now, we can print payslips. a. Go to the tasks bar and click on pre-update reports. b. Click on the laser option and select with address. 4. Now, we can print the check analysis. a. In cheque number select from inclusive and enter 1002. 12

Copyright ©Osborne Training 5. Now, we can print the payroll summary. a. Click on summary on the reports section. b. Click on Payroll Summary Part 1 (Landscape) and Payroll Summary Part 2 (Landscape). This is the end of task 3. Please ensure to update the records in the tasks bar. Also ensure you complete the FPS. Task 4 Advanced Payroll Issues 1. Change the processing date to the 28.08.2016. a. Click on the payroll module and click on change processing date in the tasks bar. 2. Change the tax code for David Couchner to 1100L in the employment tab. 3. Now, deal with Neil Brown. a. Go to account and click on employment and pay elements and add the payment for commission. i. Add the commission- in the rate box, calculate £40,000/12. b. Now, we can deal with the loan. i. Click on pay elements and the loans tab. ii. Create a new loan called “company loan” iii. Enter the amount and deduction. 13

Copyright ©Osborne Training c. Now, we can deal with the deduction of earnings order. i. Click on the attachment of earnings tab. ii. Enter the deduction amount, protected earnings and reference number. iii. Click save. 4. We can now process payroll. a. Highlight all the employees. b. Click on enter payments in the payroll module. c. All staff got a 5% pay rise, so in the rate box, you must enter 1.05. You must do this for all employees. d. Ensure you enter the commission for all employees. (Ensure to use monthly wages) 14

Copyright ©Osborne Training Make sure to change this to 1.05 for the raise. e. Enter the overtime for Anna. Ensure that you calculate the rate with the 5% increase. f. Get the payroll summaries from the pre-update reports. g. Print the payslips for Neil Brown and David Couchner. i. Ensure you click on the option with loans. h. Update the records. i. Ensure you complete the FPS. Task 5 Sick pay, bonuses and leavers 1. Change the processing date to 28/09/2016. 2. Start with Neil Brown. a. Click on his file. b. Go to the employment tab. Click on pay elements add a net payment. Ensure you untick all the pension options. 15

Copyright ©Osborne Training 3. We can now deal with Anna. a. Click on her file and go to pay elements. Ensure that the bonus option is deactivated. b. Now click on the absence tab and enter the information for SMP. th c. Enter the date of leaving on the 18 of September. d. It will not allow the SMP as she has not worked for 26 weeks. 4. We can process the payments now. a. For Neil Brown, ensure the screen is as follows: b. For Pradeep, we need to enter the sick days and SSP. i. Click on the SSP/Parental Leave tab. ii. Enter the dates. iii. Click on calculate amount. 16

Copyright ©Osborne Training iv. Ensure that you subtract this amount from her payment. v. Ensure she receives a commission. (this should be based on 1833.333) c. We can now process David. i. As he is a leaver, we will need to repay the £100 he has put in the savings scheme. ii. Under deductions, put in -100 in the rate. iii. Tick the box that he is a leaver. 17

Copyright ©Osborne Training d. We can now process Anna. i. She has no commission or overtime. ii. We will have to proportionately reduce her salaries by the number of days she is absent. She was absent for 10 days. There are 22 working days in the month. Therefore, take her salary of 1083.333 and multiply it by 12 and divide it by 22. e. Print a Payroll Summary(ies) using a landscape format, for month 6 to include f. Print out payslips for Neil Brown, Pradeep Kaur and David Couchner. g. We now need to make David a leaver. Click on his file and employment. Click on leaver. 18

Copyright ©Osborne Training h. Don’t forget to do the FPS. i. Because you have made some statutory payments you need to submit an EPS. This is under the e-submissions module. j. Highlight Neil brown and print off the loan report. End 19