Q: Working with pay elements

A pay element is used to record items that are paid to or deducted from your employees. The names you assign to them appear on your employees' payslips.

For example, you may want to set up different payments to record the employees' basic pay, overtime or bonus, and deductions for union fees or sharesave. Find out more.

Can I pay a net salary to my employees?

Yes, you can use the net to gross option. Find out more.

There are two reasons why a payment is not available for you to enter hours or rates:

• You've got net to gross selected. Find out more.
• The payment status is set to Global. Find out more.

Yes. As changing the name of a pay element affects all employees that have that pay element assigned to them, the change must be made at company level.

To change the name of a payment or deduction:

1. Company > Pay Elements.
2. Payments or Deductions tab > select the pay element you want to change > Edit.
3. Description box > enter the new name > OK > OK.

Yes. To change the properties of several payments or deductions at the same time, you can use Global Changes. Find out more.

If a pay element has been assigned to an employee in error, you can delete it from their record.

1. Select the required employee > Employee > Employee Record > Employment > Pay Elements.
2. Click the appropriate tab: Payments, Deductions, Loans or Attachments > select the relevant pay element > press F8.
3. To confirm the deletion > Yes.

You can also delete pay elements from several employees at the same time using Global Changes. Find out more.

To check if your employees are being paid the minimum rate of pay for their age, use the minimum wage check option. Find out more.

You can set up factored payments that are based on one payment. For example, you can set up basic pay as the main payment and then set up a factored payment for overtime which is 1.5 times the rate of basic pay. Find out more.

If you receive a form SL1 from HM Revenue & Customs (HMRC), you must enter the start date of the student loan in the employee's record.

1. Select the required employee > Employee > Employee Record > Employment.
2. Student Loan section > From box > enter the date the student loan is due to start > Save > Close.

For more information, see the Student Loan section in Employee's employment details.

If your employee is only taking part of a week as holiday and you want to show this as a separate item on their payslip, create a new payment called Holiday Pay.

You can use their normal payment type, for example Basic Pay, to record the hours they have actually worked and Holiday Pay for the time they are on holiday.

To create a new payment, see Managing payments.

To reimburse your employee for any expenses incurred on behalf of the company, create a post-tax, post-NIC payment.

1. Company > Pay Elements > New.
2. In the Description box, type Expenses.
3. Clear all the check boxes in every section > OK.

You can now assign the payment to your employee. Find out more.

If you want to pay a bonus to your employees, you can set up a pre-tax, pre-NIC payment.

If you want the employees to receive a specific amount for the bonus whereby you will pay the tax and NIC on their behalf, you can set up a net payment. Find out more.

When you have created the required payment, use Global Changes to quickly assign it to your employees. Find out more.

You can use payments whose rate can vary depending on the circumstances they are used, for example, different overtime rates.

Rather than creating a pay element for each rate, you can use a factored payment that takes the base rate of an existing payment. You choose how the rate calculates, as a sum or percentage of an existing rate.

If the original rate changes, the factored payment automatically updates. Find out more.

If you paid your employee more overtime hours than they worked, the easiest way to correct this is to reduce the number of overtime hours you pay them next time.

If your employee isn't being paid overtime next pay day, you can enter a negative number of overtime hours. For example, if you overpaid by 5 hours, using the Enter Payments option, enter -5 in the Hours/No box against their overtime payment.

No. You can use the same payments that are assigned to your other employees. For more information about your obligations as an employer when employing students, visit the Student employees page on the HMRC website.

1. Company > Pay Elements.

2. From the list, select the payment you want to remove > Delete > Yes.

   Note: Payments assigned to employees in their record can't be deleted at a company level. You must remove them from within the employee's record first. Find out more.

The easiest way to refund the deduction is to process the same deduction as a negative one.

1. Select the required employee > Payroll > Enter Payments > Deductions.
2. Use the same values for the hours and rates as you used originally but enter a minus sign before the hours. For example, if the original amount you deducted for union fees was 1 hour at a rate of £10, in the Hours/No box enter -1.

Note: With Payroll Giving, employees are only entitled to tax relief and not NIC relief.

To set up a Payroll Giving scheme:

1. Company > Pay Elements > Deductions > New.
2. Enter a description, for example, Payroll Giving > if required, enter the default hours/no and rate.
3. In the Deduct this value before calculating section, select the PAYE check box > OK.

You can now assign it to your employees. Find out more.

Note: Further information about Payroll Giving can be obtained from the Employer's Helpline on 08457 143 143 or by visiting www.hmrc.gov.uk/payrollgiving

If an employer takes part in the Cycle to Work scheme, employees can agree to temporarily reduce their wages to pay for the hire of a bike, accessories and safety equipment. At the end of the hire period, usually 12 months, the employee owns the bike outright.

To set up a Cycle to Work scheme:

1. Company > Pay Elements > Deductions > New.
2. Enter a description, for example, Cycle to Work scheme > if required, enter the default hours/no and rate.
3. In the Deduct this value before calculating section, select the PAYE and National Insurance check boxes > OK.

You can now assign it to your employees. Find out more.

For general information about the Cycle to Work scheme please refer to www.dft.gov.uk/topics/sustainable/cycling/cycling-to-work-guarantee/

A Salary Sacrifice is when employees choose to reduce their salary in return for some form of non cash benefit, for example, a Cycle to Work scheme or childcare vouchers.

A deduction prior to tax and NIC is made, this gives the employee the benefit of reduced tax and NIC.

1. Company > Pay Elements > Deductions > New.
2. Enter a description, for example, Salary Sacrifice scheme, and if required, enter the default hours/no and rate.
3. In the Deduct this value before calculating section, select the PAYE and National Insurance check boxes > OK.

You can now assign it to your employees. Find out more.

For more information about Salary Sacrifice, visit www.hmrc.gov.uk/specialist/sal-sac-question-and-answers.htm

1. Company > Pay Elements > Deductions.

2. Select the deduction you want to remove > Delete > Yes.

   Note: Deductions assigned to employees in their record can't be deleted at a company level. You must remove them from within the employee's record first. Find out more.

An AEO is issued by the court and instructs the employer to deduct an outstanding debt directly from an employee's salary. They can be issued for a number of reasons, including collection of unpaid fines.

If you're required to deduct an AEO or DEO from an employee, you will receive a letter from the issuing authority. This contains information such as the details of the employee, the amount to be paid and the date you should start making deductions. It's your responsibility as an employer to ensure that you deduct the payments as specified.

1. From the employee list, select the employee > Employee > Employee Record > Employment > Pay Elements > Attachments of Earnings Orders.
2. Select the attachment you want to remove > press F8 > Yes.

Tip: You can't remove an attachment with year to date values for the current tax year.

Employers can deduct administration fees from their employees to cover the cost of administering an order. The current administration rate of £1 is taken from your employee's net pay each time the attachment is deducted. To find out more about deducting the administration fee, see Dealing with attachment of earnings orders.

If the Government changes this information, you can update your software to use the new legislation. If you're a Sage Cover member, we'll notify you of the changes before they come into effect. We'll also tell you how to apply the changes in your software.

You can use your software to assign more than one order to an employee.

Alternatively, you can write to the court to ask them to consolidate the orders together. This means that the employer makes one payment from the employee's salary to cover all the orders. The employer only deducts £1 towards the cost of administering the AEO. To find out more about consolidating orders, visit the HMRC website at www.hmrc.gov.uk/manuals/dmbmanual/dmbm667510.htm

If you've received confirmation from the issuing authority that the order has been paid, enter an end date in your software to stop any further payments. To find out how, see Dealing with attachment of earnings orders.

Visit the HMRC website at www.hmrc.gov.uk/manuals/dmbmanual/dmbm667510.htm

Visit the Child Maintenance options website at www.cmoptions.org

Yes. You can set up a company loan and assign it to your employee. Each time you process your employee's pay, a repayment amount will be deducted from their net pay. Find out more.

To increase the repayment amount of your employee's company loan, you need to amend the Normal Deduction Rate. To do this:

1. Select the required employee > Employee > Employee Record > Employment > Pay Elements > Loans.
2. In the Normal Deduction Rate box, amend the amount as required > Save > Save > Close.

Tip: If the employee only wants to amend the repayment amount for a one-off payment, you can amend the Repayment Due amount in Enter Payments > Loans. The next time you pay the employee, don't forget to change the Repayment Due amount back again.

1. Company > Pay Elements > Loans.

2. From the list, select the loan you want to remove > Delete > Yes.

   Note: Loans assigned to employees in their record can't be deleted at a company level. You must remove them from within the employee's record first. Find out more.