How do I set up employee payment defaults?

Summary

This article explains how to create standard payment information for use when creating a new employee.

More Information

Payment Defaults are set up in the Payroll Settings. These need to be set up with your Company's requirements in mind. Default settings include:

• Payment Method e.g. BACS, Cash, Cheque etc.
• Payment Frequency e.g. Weekly, Monthly etc.
• Payment Type i.e. Hourly or Salaried.
• Standard Hours.
• Pay Rates e.g. Standard Pay Rate, Overtime Rates such as Time & ½, Double Time etc.

Default settings are picked up when new employee records are created. These can then be edited to suit the individual employee e.g. if the majority of your staff are paid weekly, by the hour and work 42 hours, you may wish to set these as payroll defaults.

Default settings will only appear on new employee records. If you have already created employee records, any changes to the default settings will not affect the existing records. You will need to edit each individual record manually.

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

Your screen will resemble the screen displayed below:

      Payment Method : CA (CA/CH/CR/BA)

   Payment Frequency : M  (M/W/F/4)       Payment Type : S (H/S)
                                             Std Hours :  40.00

        Description    Pay Rate  / % of First /  Lump Sum  / Benefit    Pen
  1        Std Rate :     100.00                                         Y
  2      Time & Hlf :                150.00                              Y
  3     Time * 3Qtr :                175.00                              Y
  4       Dble Time :                200.00                              Y
  5       TEST RATE :      50.00                                         Y
  6                 :                                 0.00               Y
  7                 :                                 0.00               Y
  8                 :                                 0.00               Y
  9                 :                                 0.00               Y
 10                 :                                 0.00               Y

"Payment Method"

Enter the appropriate default settings for your Company:

• 'CA' - Cash
• 'CH' - Cheque
• 'CR' - Credit Transfer
• 'BA' - Bank Account Transfer (this includes all Automated Pay systems e.g. Natwest Autopay)

"Payment Frequency"

Enter the appropriate default settings for your Company:

• 'M' - Monthly
• 'W' - Weekly
• 'F' - Fortnightly
• '4' - 4 Weekly

"Payment Type"

Enter the appropriate default settings for your Company:

• 'H' - Hourly
• 'S' - Salary

"Standard Hours"

Enter the standard number of hours worked if "Payment Type" is 'H' - Hourly.

Enter '1' as the "Standard Hours" worked if "Payment Type" is 'S' - Salary.

"Pay Rates"

Alongside "Standard Rate", enter the default rate:

• If Payment Type is Hourly - enter the hourly rate

£6.00

• If Payment Type is Salary - enter the Salary Rate based on the Payment :Frequency

£200 per week, £800 per month.

Generally you would leave this blank since salaried employees are likely to be paid different amounts and there will be no standard figure.

"Pay Rates"

You have the option to create 9 "Pay Rates" alongside the Standard Pay Rate. These can be used to set up Overtime Rates

Time 1/2, Double Time.

• Enter a "Description" for the Pay Rate

this will appear on payslips and the payroll screen when you run a payroll period.

• Enter a default value for the "Pay Rate" under the relevant "Pay Rate" Rate

an hourly rate, a percentage of the Standard Pay Rate or Lump Sum.

• If you do not wish to enter a default value leave these at zero.

The value varies for all employees

• If "Pay Rates" are added or amended after employee records have been created, the description and type of rate e.g. Lump Sum, will be amended on the existing records. However, actual amounts

£6.00 per hour will not appear

• You will need to amend each employee's record to enter the value for the new "Pay Rates". Any employee records created after the changes will pick up all "Pay Rates", types and default values.

"Benefit"

This column is for setting up payrolled benefits in kind. See How do I Record Benefits in Kind? for more information.

"Pen"

All pay rates by default are taken into account when calculating employee and employer pension contributions. To have a pay rate excluded from pensionable gross pay then change this column to 'N'.

See also

• How do I run a payroll period?
• Setting the government gateway credentials
• How do I set my company HMRC details?
• How do I Create a Department?
• How do I add a new employee to the payroll?
• How do I Create a Department?

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Keywords AND Misspellings

payment, payroll, parameters, settings