Payroll. Year End Guide Sage One. Payroll

Transcription

1 Payroll Year End Guide 2013 Sage One Payroll

2 Table of Contents PYE Checklist 3 Part 1: Finish Pay Processing 4 Completing the Final Pay Run 5 Extra Pay Runs 7 Part 2: Year End Reports 8 Reviewing Employee Pay 9 Generating the P35 File for Submission to ROS 10 Generating P60s for Employees 13 Part 3: Starting Pay Processing in the New Year 15 Reviewing Budget 2014 Changes 16 Importing Employee Tax Allowances 17 Further Information 19 Holidays at Payroll Year End 20 Merging Duplicate Employees for the P35 22 Local Property Tax (LPT) 24 2

3 PYE Checklist This printable checklist provides an easy way to keep track of your progress through Payroll Year End tasks. Part 1: Finish Pay Processing in the Old Tax Year Done? Task 1: Completing the Final Pay Run of the Old Tax Year Task 2: Checking for Extra Pay Runs Part 2: Year End Reports Task 1: Reviewing Employee Pay Task 2: Generating the P35 File for Submission to ROS Task 3: Generating P60s for Employees Part 3: Starting Pay Processing in the New Tax Year Task 1: Reviewing Budget 2014 Changes Task 2: Importing Employee Tax Allowances 3

4 Part 1: Finish Pay Processing To begin Payroll Year End, complete all pay processing in the tax year that is coming to an end.. Task 1: Processing the Final Pay Runs of the Old Tax Year In each pay cycle that the business uses, process the final pay run for all relevant employees Task 2: Checking for an Extra Pay Run One or more of your Weekly pay cycles may involve an extra pay run in the tax year that is coming to an end. Pay processing in an extra pay run is slightly different to other pay runs. However, the payroll system will handle these differences automatically. 4

5 Completing the Final Pay Run In each of the pay cycles your business uses, complete the final pay run of the old tax year for all employees in that cycle. 1. Process the final pay run of the tax year in the normal way. In some years, there may be an extra pay run. The final pay runs of the tax year are: Weekly employees: Week 52 (or Week 53 if there is an extra pay run) Two-Weekly employees: Two-Week 26 (or Two-Week 27 if there is an extra pay run) Four-Weekly employees: Four-Week 13 (or Four-Week 14 if there is an extra pay run) Monthly employees: Month Use the Pay Trends graph and the Detailed Report to confirm that all payroll values are correct. 3. Click Complete Pay Run. 4. Click Confirm. The Completed Pay Run screen opens. Here you can carry out tasks including: Printing payslips Recording the P30 payment, which you make to the Revenue Commissioners. First Pay Run of the New Tax Year You may be wondering what happens when you proceed to the first pay run of the new tax year. The answer is: nothing unusual. The system starts this pay run exactly as it would any other. You don't need to do anything extra. Simply begin processing the first pay run as normal. Note: The software has already been updated with all the relevant changes announced in the Budget for the new year. 5

6 Processing Holidays at the End of the Year To learn how to process holidays that occur over the holiday season at the end of the year, see Holidays at Payroll Year End. 6

7 Extra Pay Runs Week-based pay cycles can sometimes involve an extra pay run at the end of the year. The date of your first pay run determines whether an extra pay run will occur. Weekly payrolls In a Weekly payroll, the last pay run of the year is usually Week 52. However, in some years there is an extra pay run: Week 53. Two-Weekly payrolls In a Two-Weekly payroll, the last pay run of the year is usually Two-Week 26. However, in some years there is an extra pay run: Two-Week 27. Four-Weekly payrolls In a Four-Weekly payroll, the last pay run of the year is usually Four-Week 13. However, in some years there is an extra pay run: Four-Week 14. Monthly employees never have an extra pay run. Tax and USC in an Extra Pay Run In an extra pay run, employees who pay tax on a cumulative basis are switched to the Week 1 (non-cumulative) basis. There are no additional USC cut-off allowances in an extra pay run. You ll see this reflected in the extra pay run s calculations. Checking for an Extra Pay Run An easy way to check for an extra pay run this year is look at the Pay Calendar: 1. Click the Settings button (in the top right). 2. Click the Payroll Settings link. 3. Click the Calendar Settings button. 4. Click the View Pay Calendar button. 5. Check the list of pay runs to see if there is a Week 53, a Two-Week 27 or a Four-Week 14. 7

8 Part 2: Year End Reports Now you are ready to generate Payroll Year End reports. This involves: Task 1: Reviewing Employee Pay The Review Employee Pay screen gives you a detailed breakdown of each employee's pay. Task 2: Generating the P35 Submission for ROS At Payroll Year End you must generate a P35 file for your business, and submit it using the Revenue Online Service (ROS). Task 3: Generating P60s for Employees You must print and distribute P60s to all employees still in your employment at the end of the tax year. 8

9 Reviewing Employee Pay The Review Employee Pay screen gives you a detailed breakdown of each employee s pay for the tax year. Before generating your P35 submission for this tax year, make sure all your payroll totals are correct. 1. Open the Year End tab. 2. Click the Review Employee Pay button. 3. All the employees who were paid during the tax year are listed. Check each employee s Total Pay To Date and Net Pay To Date values for the year. 4. To view a detailed breakdown of a single employee, click the View Details link. 5. The detailed breakdown is organised into colour-coded columns: The green column contains payment values. The red columns contain tax and other deduction values. 6. Each row relates to a particular pay run. Click a Payslip link on the right-hand side of the screen to view the employee s payslip for a particular pay run. 9

10 Generating the P35 File for Submission to ROS At Payroll Year End, you must generate a P35 file and submit it to the Revenue Online Service (ROS). Sage One Payroll guides you through this process. Note: The official ROS documentation on P35 submissions is here 1. Open the Year End tab. 2. Choose the Tax year to report on. 3. Click Generate P35 ROS File. 4. The system begins by analysing the payroll information required to generate the P35. If it detects no problems, you can begin process of creating the P35. If it detects problems, these are listed. You must deal with all the listed issues before you can proceed with the P35. Missing Mandatory Information Employee PPS numbers are mandatory on the P35. In rare cases where the PPS number is not available, you MUST specify the employee s date of birth and the first line of their address. Duplicate Employee Records For the purposes of the P35 submission, the system attempts to merge employees who have had multiple periods of employment with the business during the tax year. The criteria the system uses to identify these employees are: The employee records have the same PPS number. The employment dates and processed pay dates in these employee records do not overlap. If the dates overlap, the system won t be able to merge the records. You ll need to manually adjust the employee information before you can proceed with the P35. For more information, see Merging Employees for the P In the Employer Details window, make sure the company name is specified correctly. 6. Specify the Employer Registration Number if necessary. 10

11 7. Click Submit. The P35 file is created. The P35 ROS File Download screen opens. Here you'll see information about how to submit the P35 file. Submitting the P35 File After you have created the P35 file, you ll see an outline of what you need to do to make submit the file using the Revenue Online Service (ROS). The P35 paper report link enables you to generate a printable version of the P35. Use this to confirm that the P35 is correct before submission. The Download P35 file link enables you to obtain a local copy of the P35 file, which you can then upload to the ROS web site. Remember to make note of the local save location on your computer. The ROS link takes you to the ROS website. You can also return to the Year End tab later to: Download the P35 ROS file Print out the P35 report These options are available as drop-down options when you hover over the Original P35 button. Generating a P35 Correction File If you need to correct P35 information that you have already submitted, you can submit a P35 Correction file. For example, after submitting the P35, suppose that you discover a mistake that means pay values have to be corrected. You need to communicate the corrected values to ROS in a P35 Correction file. Essentially, this is a new P35 file. The process of creating it is the same as that of a normal P35: 1. Open the Year End tab. 2. Select the Tax year to report on. 3. Click Generate Correction File. 11

12 Note: You can download or print the original P35 by hovering over Original P35 and selecting the appropriate option. 4. The system attempts to prepare a list of employees for inclusion in the P35 correction file. If it encounters any employee data issues, a list of them is displayed. 5. To see a complete list of employees included in the P35, click Show hidden employees. 6. Click Next. 7. The Employer Details window opens. Make sure the company name is specified correctly. 8. Specify the Employer Registration Number if necessary. 9. Click Submit. 10. The P35 ROS File Download screen opens. You can now download and submit the P35 correction file. The steps are identical to those of the original P You can print the P35 report, which shows the contents of the correction file. The Year End tab also enables you to: Hover over P35 Correction to download the correction file. Print or download the original P35. Generate another P35 correction file, by clicking Generate new correction. Supplementary Employees When you generate a P35 Correction file, the system compares your current payroll data to the original P35 that was generated. If the system identifies an employee who was not on the original submission, they are listed as a supplementary employee in the P35 Correction file. The criteria the system uses to identify supplementary employees are as follows: If their PPS number is present in the payroll data, but it was not in the original P35, the employee is listed as Supplementary. In the case of an employee who does not have a PPS number, if their Name and Date of Birth are both present in the payroll data, but were not in the original P35, they are listed as Supplementary. All other employees are listed as Amended in the P35 correction file. 12

13 Generating P60s for Employees As part of the Payroll Year End process, you must print and distribute P60s to employees still employed by the business at the end of the tax year. 1. Open the Year End tab. 2. Choose the Tax Year to report on. 3. Click Generate P The employees P60s are generated in PDF form, and are displayed onscreen. 5. Print them out and distribute them to the employees. P60s for Company Directors If an employee is marked as a company director, the Enter D if employee was a director box on their P60 contains the letter D. If you spot a director who is not identified as such on the P60, here s how you fix it for the current tax year: 1. Open the Pay tab. 2. Click the final pay run of the year. 3. Click Edit Pay Run. 4. You are now in the final pay run of the year in corrections mode. Open the director s pay details in the Edit Pay screen. 5. Click the director s name. (This is a hyperlink.) 6. In the Edit Tax Details window, select the Director checkbox. 7. Click Save. Now you can go back and generate P60s again. The employee should be marked as a director in the P60. To ensure that this problem doesn t arise again in subsequent years, carry out these steps: 1. Open the Employees tab. 2. Select the employee. 3. Click the Edit button. 13

14 4. Select the Director checkbox. 5. Click Save. Standard Rate Cut-Off and Tax Credit Values The Standard Rate Cut-Off value in the P60 depends on the employee s tax status: Normal and Week 1 status For employees with Normal and Week 1 tax status, the P60 shows the Standard Rate Cut-Off specified in the P2C tax allowances file issued by Revenue. If there is an extra pay run in this tax year, the extra Standard Rate Cut-Off and Tax Credit values awarded in the extra pay run will be reflected on the P60. Emergency status The P60 shows the Standard Rate Cut-Off and Tax Credit values used for the latest pay period. USC Cut-Off Values Normal and Week 1 status The P60 shows the USC Cut-Off values specified in the P2C tax allowances file issued by Revenue. No USC Cut-Off values are awarded when an employee on a Normal or Week 1 tax status is processed in an extra pay run. So the USC Cut-Off values specified in the P2C tax allowances file will still be output in this case. Emergency status There are no rate bands granted for USC on an Emergency basis. So no USC Cut-Off values will be output in this case. 14

15 Part 3: Starting Pay Processing in the New Year Now you are ready to start pay processing in the new tax year. This involves: Task 1: Reviewing Budget 2014 Changes Budget 2014 had little impact on how pay is processed. All the necessary changes have already been applied automatically to your payroll system. Task 2: Importing Employee Tax Allowances The Employee Tax Allowances (P2C) file issued to your business at Payroll Year End contains 2014 tax allowance values for all your employees. You need to import this file. 15

16 Reviewing Budget 2014 Changes The Government s announcement of Budget 2014 on October 15, 2013 did not contain any major changes to the way pay is processed. However, it did contain some minor changes that affect payroll. Sage One Payroll contains these changes automatically. You don t need to do anything. Employer s PRSI in 2014 A reduced rate of employer s PRSI of 4.25% was introduced in 2011 for employees earning less than 18,000 per annum. This provision was intended to encourage businesses to take on employees. Under existing legislation, this reduced rate expires on December 31, The rate reverts to 8.5% for

17 Importing Employee Tax Allowances The Employee Tax Allowances (P2C) file contains employee tax allowance values for the tax year (or the remainder of the tax year). You import the file into Sage One Payroll to apply these values to the employees. The values include: Tax credit details USC rates Standard rate cut-off points Local Property Tax (LPT) information (LPT applies for the full tax year in 2014) When to Import a P2C Importing the P2C file is the final task in the Payroll Year End process. It applies tax allowance values to the employees for the new tax year. Note: Circumstances may arise during the course of any tax year that mean you need to import a new P2C file. So the import process is not only a PYE task. Importing a P2C 1. Go to the ROS website and download the company s P2C file. 2. Save it to a suitable local folder. 3. Open the Employees tab 4. Click the Import Employee Tax Allowances button. The Tax Allowances File Import wizard opens: 5. Stage 1: Upload the File a. Click the Choose File button and browse to the location where you saved the P2C file. b. Select the file and click Open. c. Click Next. 6. Stage 2: Business Summary a. The information on the Business Summary screen is taken from the P2C file. Check it to make sure that you ve downloaded the correct P2C file. b. Click Next. 7. Stage 3: Employees 17

18 The Employees screen lists all the employees whose tax allowances will be imported into the payroll system. It also lists any employees whose information will not be imported, along with the reasons why. Click Submit. The P2C file s tax allowances are imported into the payroll system. If the P2C is not yet available If the P2C file is not available at the beginning of the tax year, you can still process pay using the previous year s tax allowance values. Import the P2C when it becomes available. The payroll system will make the necessary adjustments to pay after the new P2C is imported. P2C too large error A P2C file should upload correctly as long as it contains no more than 20 employees. If the P2C import fails because there are too many employees, you can solve the problem by carrying out the following steps: 1. Open the P2C file in Notepad or a similar editor. 2. Delete any lines relating to employees who are not currently active in payroll. 3. Save the P2C file, making sure not to change the file extension. 18

19 Further Information The sections that follow provide further information about aspects of Payroll Year End: Holidays at Payroll Year End Merging 'Duplicate' Employees for the P35 Local Property Tax (LPT) 19

20 Holidays at Payroll Year End Because the tax year coincides with the calendar year, many employees are likely to be on holidays for the final days of the old tax year and the first few days of the new tax year. Weekly employees can receive holiday pay for the holiday period in advance. Two-Weekly, Four-Weekly and Monthly employees can t currently receive holiday pay in advance. This article relates to Weekly employees only. Which tax year does a holiday pay run belong to? The Pay Date determines which tax year a pay run belongs to: If the Pay Date occurs on or before December 31st, it belongs to the old tax year. If the Pay Date occurs on or after January 1st, it belongs to the new tax year. The determining factor is when the employee is paid for the work, not when the work was carried out. The situation is exactly the same for holidays. The Pay Date determines whether the holiday pay run belongs in the old tax year or the new one. Example 1: Processing Week 52 in the new year Suppose that you have a weekly payroll in which every Friday is a pay day. The last Friday of the tax year is the Dec 25th, which falls in Week 51. So there is no pay day in the old tax year for Week 52. If employees are being paid in advance for holidays taken over the holidays, and they will not return to work until the second pay run (or later) of the new tax year, carry out the following steps: Process pay up to the end of the old tax year. Make sure not to process Week 52. The pay date for Week 52 occurs in the new tax year. Process the relevant holiday pay run(s) in the new tax year, including the holidays taken in Week 52 of the old tax year. 20

21 Example 2: Week 52 and Week 1 are holiday weeks Suppose that you have a weekly payroll, and all employees are on holidays over the Christmas period for two weeks. Week 52 is the first holiday week. Week 1 of the new tax year is the second holiday week. You can t process the two holiday weeks in the old tax year. They must be dealt with separately. Process pay up to the end of the old tax year. Making sure not to include any pay that would normally be due in the new tax year. While processing Week 51, give each employee one holiday week using an Advance Holiday Pay payment. (Set one up if necessary.) This will pay the employees up to and including Week 52. When the employees return to work after their holiday period, they will be paid for the first time in the new year in Week 2, because Week 1 was a holiday week. Implications for Paypath payments Employees who are paid directly through Paypath will be sent two payments: One Paypath file will be created for the final pay run of the old tax year. Another Paypath file will be created for the first pay run of the new tax year. The employee gets both of these payments in advance because they are holiday pay. 21

22 Merging Duplicate Employees for the P35 When you are preparing your P35 return at Payroll Year End, the system attempts to merge employees that seem to be duplicates. A duplicate employee in this context is identified using the following criteria: Two or more employee records in the relevant tax year have the same PPS number. These records have dates of employment that do not overlap. Duplicate employee records may not align in other respects. For example, the employee names may be different. Or the records may have different pay frequencies. They will still be merged in the P35. However, the employee records remain separate in the payroll. How are the employee details merged? Merged totals are the sums of the totals from their individual employee records. The employee name associated with the merged totals is the name on the currently active employee record. There can only be one of these. Employees who have been set to Do Not Pay in every relevant pay run, or have all pay runs saved with zero values, are excluded from the P35. These employees will have zero amounts of Gross Pay, tax, PRSI, LPT and USC in the tax year. Checking the P35 Paper Report The P35 paper report enables you to review the details of the P35 submission before you upload it on the Revenue Online Service (ROS) web site. This report is available after you have created the P35 submission. It shows which employee records have been merged, if any. If the system has problems merging employees Occasionally the payroll system will be unable to merge employee records with the same PPS number. In this event, when you the Conflicting Employments screen will open when you try to create a P35. 22

23 Conflicting Employments screen The Conflicting Employments screen lists employees with the same PPS number, but which conflict in some way that requires user intervention before they can be merged on the P35. Click an employee to go directly to their employee record and make the necessary changes, which can include: Correcting employee Start Date and End Dates You may need to correct the employment Start Date and End Dates of one of more employees, so that they do not overlap. Correcting PPS numbers You may need to correct one or more employees PPS numbers. An employee may erroneously have been assigned a PPS number that actually belongs to another employee. Transferring pay run information to a designated employee record You may need to transfer pay run information from one employee record to another. This commonly arises when two employee records have erroneously been set up for the same employee, and they have been used interchangeably throughout the year to pay the employee. To resolve this, you need to designate one of the employee records as the correct one, and then use Edit Pay Run to transfer the information into the designated record by carrying out the following steps: i. Update the designated employee record to reflect all of the payments and associated deductions for that employee. ii. Remove any pay run values that exist on the duplicate employee records. iii. Update these duplicate records with a Finish Date to make them inactive. 23

24 Local Property Tax (LPT) Local Property Tax (LPT) is a self-assessed tax paid on the market value of residential properties in the State by property owners (and certain others). A half-year LPT charge applies in 2013, applicable from July 1 to Dec 31. From 2014 on, a full-year LPT charge applies. This article provides basic information about LPT. For full details, refer to Revenue s Local Property Tax guide. How do I know whether to deduct LPT? There are a number of ways to an employee can choose to pay LPT. One of these is to have it deducted at source from pay. Or if a person fails to meet their LPT obligations, the Revenue Commissioners can enforce a mandatory LPT deduction from their pay. In either of these cases, the latest P2C file will specify an LPT liability amount for the employee. No such amount is specified for employees who don t pay LPT through payroll. So by importing the P2C file, you configure the payroll to deduct LPT for the relevant employees automatically. Importing a P2C with LPT information A normal P2C file contains LPT information, if LPT is relevant to any of the employees in your payroll. So to configure the payroll for LPT, import the P2C in the normal way. Check ROS frequently to ensure that your employees tax details are up to date. Employer obligation to process LPT From July 2013, employers are required by law to facilitate their employees to pay Local Property Tax (LPT) through the payroll system. You should deduct LPT from an employee s pay only if you have received a P2C indicating that you should do so. 24

25 When should LPT be deducted? LPT amounts are deducted in each pay run automatically for all applicable employees. The payroll system will automatically spread the employee s LPT liability evenly across pay runs. Will payroll reports contain LPT information? Yes. Employee LPT information is included automatically in the P30 and P35. It is also included automatically in payslips, P60s, P45s and the detailed report. LPT details in payslips For any employee paying LPT through payroll, the relevant LPT amount is deducted automatically from their pay. This amount is listed in the Deductions section of the Edit Pay screen when you are processing the pay run. And in the employee s payslip you can see their LPT details: Item Collected This Period Collected Year To Date Total Due This Year Remaining This Year Description The amount of LPT deducted from the employee s pay in this pay run. The amount of LPT deducted from the employee s pay in the tax year to date, including this pay run. The employee s total LPT liability for the year. The employee s remaining LPT liability for the tax year. (The total amount that will be paid in subsequent pay runs in this tax year.) 25

26 Sage One Payroll