How do I record benefits in kind?

Summary

Benefits in Kind and Expenses can be entered through Payroll. The amount of tax due will be calculated and deducted from the employee in each Payroll Period.

More Information

Before using this option you will need to create records in the Payment Defaults to allow the system to record Benefits in Kind.

Configuration

Go to " Payroll Payroll Maintenance Payroll Settings Company Parameters Payment Defaults".

• Move down to the next free line in the "Description" column.
• Enter a description, e.g. 'Benefits-Cars' or 'Benefits-Meds' (up to a maximum of 15 characters).
• Use the <Tab> key to move across the columns to the "Benefit" column.
• Press <Ctrl+F1>.
• To add a new Benefit Type, enter a 3 character code for the benefit, e.g. 001.
  • If records already exist, either select the required type or click [Add] to create a new type.
  • Enter a description, e.g. Company Cars.
  • If the benefit is a car benefit or a fuel benefit:
    • Move to the "Settings" tab.
    • If this is a car benefit, at "Benefit type:" choose 'Car'.
    • If this is a fuel benefit, at "Benefit type:" choose 'Fuel'.
  • Click [Done].
• Repeat to add any other types of Benefits you intend to put through the payroll.
• Press <Esc> and exit back to the Payroll main menu.

Application

Wait until you are in the first period in which to apply the benefit.

Go to " Payroll Run Payroll Period".

• Enter <Y> against the frequency the employee falls into and click [OK].
• You will see a column for each type of benefit, as created in the Configuration section above.
• Using the arrow keys, move down the list of employees until the appropriate employee is highlighted.
• Click [Benefits] or press <Shift+F9>.
• If the employee has existing records, click [Add] to add a new benefit for the employee.

Once a benefit has been created, the amount per period on which tax will be calculated will be shown in the appropriate column.

The value shown will NOT be added to or deducted from the employee's Nett Pay. It is included in the Gross Pay figure to allow the correct tax to be calculated.

Creating a new employee benefit

• Enter the code for the Benefit "Type" or press <Ctrl+F1> and click [List] to select the relevant type.
• Enter a suitable "Reference" for this record, e.g. the Registration Number of the company vehicle or the type of Medical benefit such as Life Insurance.
• At "Start Date", enter the date the benefit started.
• You may enter an "End Date" if known but you may leave it open ended by pressing <Tab> to move through the date field without completing it.
• Enter the Total Annual Cash "Equivalent amount" for the benefit. The Tax per period will be calculated based on this amount.
• If you need to record additional notes, click the [Notes] tab.
• Click [Done] and [Accept] the record.

Special information for cars

If this is a car benefit:

• Move to the "Car" tab.
• At "Make:", enter the make and model of the car.
• At "CO2:", enter the approved CO2 figure for the car.
• At "Fuel type:", choose the fuel type of the car.
• If this car also comes with a fuel allowance, at "Fuel benefit:", choose the benefit from the available options, otherwise choose 'None'.
  • You will need to create a new benefit for the fuel allowance beforehand.
• At "Price:", enter the list price of the car.

Amending an employee benefit

To amend or cancel a benefit: Go to " Payroll Run Payroll Period".

• Enter <Y> against the frequency the employee falls into and click [OK].
• Using the arrow keys, move down the list of employees until the appropriate employee is highlighted.
• Click [Benefits] or press <Shift+F9>.
• Select the record to amend and click [Edit].
  • To amend the Description, simply overtype it.
  • To enter an end date, move down to the "End Date" field. Once the date is reached, the tax will no longer be deducted on the benefit.
  • If you need to record additional notes, click the [Notes] tab.
• Click [Done] and [Accept] the record.

Additional Records

To add records for an employee, follow the steps in the Application section e.g. when an employee changes their company vehicle.

See also

• How do I run a payroll period?

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Keywords AND Misspellings

benefits, benefits in kind, expenses, tax on company car, medical, life insurance, tax