Payroll FAQs

Our Top 5 questions this month.

Please note software answers relate to Sage payroll

  1. An employee has left our business before the end of the period but I have already processed the payroll what should I do?

As long as the payment has not yet been made to the employee you have two options: –

  1. Roll back the applicable employee, this will mean you can amend the employees pay and revise their payslip. Please note with this option you will only be able to process the pre-update reports for this employee and any statutory payments made in the original run for this employee will need to be entered again.  Once you are happy the payroll is correct update the employee and submit FPS adjustment to HMRC.
  2. Use the Recover function. Using this function will take you back to before you updated the payroll and this will allow you to print off all necessary reports for the full payroll (if required) after the amendment has been made to the individual employee.  Don’t forget as with option one, once the payroll has been amended you must update and submit a FPS adjustment.

For both options remember to re-print your Form P32 with your revised liability and submit a new EPS to HMRC.

Please note if you have already made payment to HMRC and the revised amount is now less you can reduce the next month’s amount however, if an additional payment is due this must be paid.

2. I have already processed a leaver’s pay and issued the P45 but have now been instructed a bonus payment was due –  what should I do?

  • Make a note of the employees leave date and remove from the employees record
  • Amend tax code to 0T tick month/week 1 basis
  • Process the additional payment only
  • Produce necessary reports and payslip
  • Update payroll
  • Enter original leaving date back into payroll (DO NOT issue the P45 again)
  • Submit FPS adjustment
  • Provide payslip and covering letter to employee explaining the legislation states a revised P45 should not be issued and they should contact HMRC direct if they believe they have overpaid tax

3. One of our employees is on maternity leave and would like to be paid for their holidays before maternity has ended, is this ok?

Employees can accrue holidays whilst on maternity leave but they cannot receive payment for them. The only payment allowed during leave is for keeping in touch days (KIT). Holidays should be taken at the start or end of maternity leave.

4. We don’t need to pay the apprenticeship levy because we don’t use apprentices?

Legislation states that even if you do not employ apprentices you must still pay the levy if your total pay bill is £3million or above.  Please note if you are part of a group of companies and they are connected the total pay bill across the UK group companies must also be included, however you can consider applying the £15k allowance across the companies.

5. We’ve received an outstanding PAYE letter but we’ve paid the amounts on our P32?

You must ensure you submit your EPS every month and that the figures for all statutory payments and apprenticeship levy are correct. If the EPS is not submitted HMRC will not be able to reconcile your payments and will contact you for outstanding PAYE. It is best practise to submit an EPS each month, even if you do not have statutory payment or apprentice levy amounts due. This will ensure you get in the habit of making the submissions and to pick up any discrepancies in the system data as early as possible.