Custom pay codes

Use custom pay codes to manage different pay types for the payroll. They can be added manually or imported.

1. Select the company name, then select Settings.
2. Select Pay Codes.
3. Select Custom Codes.

4. To create a new code, select Add Pay Code.

   If an existing code needs to be changed, select it from the list. Changes to pay code settings are tracked in the employer audit.

5. Enter a unique name in Code.
6. Enter a description of the code that displays on the employee payslips in Title.
7. Select Type, as either an Addition or Deduction.

8. Select a Calculation. The options that must be set depend on the option selected.

   • Fixed Amount: the amount entered is paid or deducted from the employee.
   • Percentage of Basic Pay The standard amount paid to an employee which excludes additional payments like bonuses, overtime, and allowances.: the amount entered calculates a percentage of the employee's basic pay only to be paid or deducted.
   • Percentage of Net Pay: the amount entered calculates a percentage of the employee's net pay only to be paid or deducted. Net pay is pay after tax, National Insurance A system of contributions paid by workers and employers in the UK, which funds various state benefits, such as the State Pension and Jobseeker's Allowance., and other elements are calculated.
   • Multiple of Hourly Rate: the amount entered in hours is paid as a multiple of the employee's hourly rate, usually used for overtime.
   • Multiple of Daily Rate: the amount entered in days is paid as a multiple of the employee's daily rate.
   • Fixed Annual Amount: the amount entered is split over the number of periods in the year. If added part way through the year, the value is split over the remaining periods.
9. If required, enter a Default Value.
10. For daily or hourly rates, where required, select a Multiplier option.
11. If required, select a Subject To option.

12. To apply more Subject To settings, select Advanced settings, then select from:

    • Is Qualifying Earnings To assess the employee we use the Earnings Trigger for automatic enrolment – This is based on the qualifying earnings elements. This is made up of pay elements like Salary, Hourly Pay, Overtime, Commission, Bonus, Statutory Payments etc. Once the employee has been assessed then that trigger is no longer used. for AE: includes the code in the assessment of employees for automatic enrolment and, depending on the pension scheme, it may be included in the pension calculation.
    • Is Notional: includes the pay code in the Tax or National Insurance calculation, based on Subject To, without paying the amount to the employee. For more information, go to notional payments.
    • Apply Auto-Adjustments.
    • Subject to Real-time Class 1A Employers pay these directly on their employee’s expenses or benefits. NICs.
    • Doesn't count towards accrued holiday.
    • Doesn't count towards determining pension tier.

    Options are also available for Trivial Commutation Payments, Flexible Drawdown, and Pay Code Sets.

13. To save, select Create Code.