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Working with pay elements

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Is your employees' salary made up from a number of separate payments and deductions? Using Sage 50 Payroll you can display these individually on the payslip to give your employees full visibility of their pay.

For example, their normal wages, overtime, bonus or commission. You can create an unlimited number of payment types using Sage 50 Payroll.

Setting up your basic pay elements should be one of your first tasks. This ensures they can be linked to your employee records as you create them. You can always add more at a later date.

To create a new pay element

1. Company > Pay Elements > New.

Tip: To sort the payments listed in an ascending or descending order, by click the appropriate column.

2. To change the details of an existing payment, select the payment you want to change, then click Edit.

Note: The Reference number is assigned for you and can't be changed.

3. Enter or amend the details as required.

   Payment details

   Use this table to help you complete the net payment details.

   Option name	Description
   Status	Choose the appropriate status for your pay element as follows: Factor -To create a factored payment. See Maintaining factored payments. Fixed - To change the Hours/No and Rate in the employee's record. You can also change the hours when you pay your employees using the Enter Payments option. Global - To only make changes to the payment at a company level. Variable - To change the Hours/No and Rate in the employee's record and when you pay your employees using the Enter Payments option.
   Description	Enter a description for the payment.
   Base Payment	This option is used when creating a factored payment. Choose the payment you want to base your factored payment on.
   Default Hours/No	Either set a default number of hours or leave it as zero.
   Rate	Available if Status is set to Fixed, Global or Variable. You can enter a default rate or leave it as zero. If you leave it as zero, you have to enter the rate when you pay the employee using the Enter Payments option.
   Multiplier	This option is used when creating a factored payment. Enter a default multiplier or leave it as zero. From the drop-down list, choose how you want the payment to calculat - either as an amount multiplied by the base payment rate or as a percentage of base payment rate. For example, 1.5 times or 10 percent of the base payment rate.
   PAYE	If the payment isn't subject to tax, clear this check box. The payment is added to the employee's pay after tax has been deducted.
   National Insurance	If the payment isn't subject national insurance (NI) contributions, clear this check box. The payment is added to the employee's pay after NI has been deducted.
   Salary Sacrifice	To use this payment in the pension scheme salary sacrifice calculation, select this check box. The payment used in the calculation must be the employee's regular salary and not an additional payment that may not always be paid, such as a bonus or commission. Want to know more about salary sacrifice pension schemes? See Salary sacrifice pension schemes.
   Pension (Main)	If you don't want to take the main pension contribution from this payment, clear this check box. The payment is added to the employee's pay after the pension contribution has been deducted.
   Pension (AVC)	If you don't want to take additional voluntary pensions contributions (AVC) from this payment, clear this check box. The payment is added to the employee's pay after the AVC has been deducted.
   Qualifying Earnings	If you don't want this payment to form part of qualifying earnings for automatic enrolment, clear this check box. Qualifying earnings are used to determine employee eligibility as part of the pension calculation under automatic enrolment, and are defined as: Salary Wages Commission Bonuses Overtime All statutory payments. Sage 50 Payroll automatically treats statutory payments as qualifying earnings. You need to determine if a payment you're making is one of the components of pay that make up qualifying earnings. You may also include additional types of payment to the employee to be considered as qualifying earnings. Any alternative payment types over and above those listed here can be considered as qualifying earnings at your discretion.
   Community Charge	If you don't want your payment to be subject to Community Charge Attachment of Earnings Orders, clear this check box. The payment is added to the employee's pay after the community charge has been deducted.
   Council Tax	If you don't want your payment to be subject to Council Tax Attachment of Earnings Orders, clear this check box. The payment is added to the employee's pay after the council tax has been deducted.
   Other Attachments	If you don't want your payment to be subject to other Attachment of Earnings Orders, clear this check box. The payment is added to the employee's pay after any other Attachment of Earnings Orders have been deducted.
   Include Value in Minimum Wage calculation	To exclude this payment rate when calculating the minimum wage for employees, clear this check box.
   Include Hours/No in Minimum Wage calculation	To exclude the hours for this payment type when calculating the minimum wage for employees, clear this check box.
   This payment includes a premium element	If this payment includes an element that is paid at a higher rate, such as overtime or shift work, select this check box. This excludes this part of the payment from the minimum wage calculation.
   To find out more abut the minimum wage calculation in your software, see Applying the minimum wage check. For more information about the guidance on the minimum wage, please see the GOV.UK website - The National Minimum Wage.
   Include for Holiday Accrual	To include this payment when calculating the employee's holiday fund, select this check box.
   Auto Advance	To include the value of the payment when advancing pay to employees, select this check box.
   Include for Weekly Averages	To exclude this payment type from the 12 or 13 week averages calculation used for holiday pay, clear this check box. Find out more.
   Include in Timesheet Entry	To exclude this payment from the time sheet entry process, clear this check box. Want to know more about Timesheet Entry? See Quick entry of payments and deductions.

4. To save your changes, click OK.

You now need to assign the payments to the employee record. See Assigning payments to employees.

Need more help? You may find the Questions and Answers section useful.

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