Micropay Professional

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1 How to Make Amendments Having Used An Incorrect PRSI Class This document outlines the steps that need to be taken when an employee has been put on an incorrect PRSI class within, and has been paid for one or more periods while on the wrong class. PRSI is calculated on a Period by Period basis, unlike PAYE on Normal status, which is calculated on a Cumulative (year-to-date) basis. PRSI classes can change at any point during the course of the tax year if the employee s wages changes or if they fall under a different category of class as set out by the Department of Social & Family Affairs, e.g. become a company director, go over a certain age. To accommodate these changes the calculation of PRSI within is designed so that if an employee s class does change it will not affect the previously processed periods. However if an employee is put on an incorrect class it is not possible to automatically correct the previous periods. If this happens it is recommended that the payroll operator notifies the Department of Social & Family Affairs for further instructions. If you need to correct the PRSI values and classes of previous periods within Micropay Professional then follow the steps in this guide. NOTE: You will need to know how to manually calculate PRSI. A full listing of PRSI classes and rates is available from the Department of Social & Family Affairs in the form of the PRSI Contributions Rates and User Guide. The document is called SW14 One of the main aims of amending the PRSI values within is to ensure that the returns made to Revenue at the end of the tax year are correct.

2 There are three areas of that hold the information Included your year-end returns. Employee Details Pay/YTD Employee Details ETP ( Earnings, Tax & PRSI ) Company Tab P30/CC124 Employee Details - Pay/YTD This section of Employee Details holds, among others, the cumulative year-to-date values for Gross Pay, Tax, Employee PRSI and Employer PRSI. Depending on the PRSI classes involved it may be necessary to amend Employee PRSI and/or Employer PRSI for This Employment. Above is a screen shot of where these figures may need to be changed

3 Employee Details - ETP (Earnings Tax & PRSI) This section of Employee Details also holds values for Gross Pay, Tax, Employee PRSI and Employer PRSI, but it is recorded individually for each and every pay period. Again, depending on the PRSI classes involved it may be necessary to amend Employee PRSI and/or Employer PRSI, along with the PRSI class that was effective for each period. Above is a screen shot of where these figures may need to be changed.

4 Company - P30 / CC124 This records the monthly totals for Tax & PRSI for all employees. automatically updates this after you run End of Period. The P30 gets its values from each employee s ETP. Therefore, if a change is made on any part of an employee s ETP the current month will be updated to reflect this change. Since the P30 is automatically updated with any amendments you make to the employee s ETP, it means that adjustments need to be made within Employee Details only, in both the ETP and the Pay/YTD sections. It is important that the PRSI values in both sections tally. If they do not agree you will be given a warning onscreen when you save the employee s details. Once the adjustments are made you will need to deduct or refund the employee the difference in Employee s PRSI. NOTE: It is very important to note that you must make the changes to the PRSI in the exact month that this occurred. IE: If the PRSI was incorrect for January the change must be made here as shown below in the screenshot. The change made will be updated in the particular month that you choose. NOTE: To locate the P30, choose the Company option and then select P30 / CC124.

5 Making changes of this extent to Employee Details is a delicate procedure and you must take a backup prior to doing so. You should also have copies of each Payslip for the employee to hand, or failing that, a copy of the Gross to Nett from each pay period. If you do not have either of these then you should print a hard copy of the Earnings, Tax & PRSI report for the employee, which is found in the Reports screen under the Employee tab. The purpose of these reports is to have a hard copy of what the PRSI values and classes were before any changes Are made. It is strongly recommended (although not essential) that you make these corrections while the company is at Status START OF PERIOD (i.e. immediately after setting a new period). Employee Details - ETP Go into Employee Details and select the employee to be amended. Select the ETP tab. The fields that may require amending are: PRSI Eer (Employers PRSI) Total PRSI Eee (Employee s Total PRSI) PRSI Eee (Employee s PRSI) Health Leavy (Employee s Health Levy) PRSI Code PRSI Base For each of the incorrect periods change the above fields to the correct values where necessary, bearing in mind that they are periodic values (i.e. the amount calculated for that pay period only) and not year-to-date amounts. Make sure to change the PRSI Code for each period that the class was incorrect. If you are changing the PRSI values make a note of the difference and whether you are adding to or subtracting from it. For example if an existing PRSI Eee value is 40 and the amended value is 30, make a note of the fact that you reduced the employee s PRSI by 10. Repeat this for each period that needs to be amended, noting the differences (increase or decrease) for each amendment for Employee PRSI and Employer PRSI separately.

6 When you have all necessary changes made, sum the differences of each change for the Employee s PRSI and the Employer s PRSI. These total differences are the amounts by which you will be amending the year-to-date values on the Pay/YTD section of Employee Details. For example, if the following periods were incorrect and needed to be amended: Period PRSI Eer Total PRSI PRSI Eee Health PRSI Code PRSI Base Eee Levy A1 A A1 A A1 A1 And the correct entries should have been: Period PRSI Eer Total PRSI PRSI Eee Health PRSI Code PRSI Base Eee Levy S1 S S1 S S1 S1 Note the differences: Period PRSI Eee PRSI Eer Total Difference

7 Employee Details - Pay/YTD NOTE: After you have completed amending the ETP section DO NOT save the changes yet. Instead, Select the Pay/YTD tab. Locate the figures for PRSI this employment for Employee and Employer. Add to or reduce these amounts as appropriate by the total differences you had made to the ETP (as noted). For example: Current PRSI YTD ETP Changes Corrected PRSI Employee Employer At this stage you should check that the currently correct PRSI Code is selected in the Tax/PRSI tab. Save the changes made. If the ETP values for PRSI do not sum to agree with the Pay/YTD totals you will be given a warning onscreen and will need to make the necessary corrections. If you can save the Employee Details and no warnings appear then the adjustments are in agreement and you can proceed. Once saved the PRSI returns will be correct. If adjustments had to be made to just the Employer s PRSI then you do not need to make any further amendments. The employee s pay is not affected by what the employer contributes whatsoever. If adjustments had to be made to the Employee s PRSI then it will be necessary to deduct from them or refund to them the difference between the PRSI they paid and what they should have paid. You will have already worked out what this difference is as above. Since you will have already corrected the values in Employee Details, all that is left is to refund that money to the employee or deduct it from their wages in the next pay period

8 If you need to deduct the difference from the employee do it by setting up a new Nett deduction. Go to the Company menu and select Deductions. Call it PRSI Adj or by any other suitable title and set it as Type Nett. Go to Timesheet Entry and select the employee from whom the deduction has to be made. Enter the difference beside this new deduction along with the other timesheet values and click on Save. If the deduction is too large you may want to deduct the entire amount over a number of pay periods. If you need to refund the difference to the employee do it by setting up a new Nontaxable payment. Go to the Company menu and select Payments. Call it PRSI Adj or by any other suitable title and set it as Type Variable. Make sure that it is not marked as Taxable, PRSIable, Inc Levy or Pensionable. Go to Timesheet Entry and select the employee for whom a refund is to be given. Enter the difference beside this new payment along with the other timesheet values and click on Save. In our example it was calculated that an extra 65 of employee s PRSI had to be deducted. This would have to be deducted from the employee s pay, so the PRSI Adjustment would be set up as a Nett Deduction. The employee has now paid the correct amount of PRSI and this is reflected within the Employee Details. Company - P30 / CC124 The next time that End of Period is run both the amended employee and employer PRSI amounts will be updated onto the P30 by automatically increasing or decreasing the current month s PRSI returns, without requiring any user intervention. The reason for amending the current month and not the previous incorrect month(s) is that it is assumed that the previous months have already been returned. The next month s returns will account for the previous discrepancies. The end result will be that the totals for the year will be correct.