Opera 3

Payroll Processing

Training Manual

MTS Training Manual

R 1.1 2 Payroll Processing

Contents

Introduction ___________________________________________________________________________ 3

Payroll Processing Steps _________________________________________________________________ 4

Ribbon Bar Structure ____________________________________________________________________ 5

Payroll Processing ______________________________________________________________________ 6

Employee Record _____________________________________________________________________________ 6

Employee’s Payments _________________________________________________________________________ 6

Payroll Processing Actions ______________________________________________________________________ 7 Payments and Deductions ___________________________________________________________________ 8

Calculate _________________________________________________________________________________ 9

Global Calculation ______________________________________________________________________ 9

Calculation Report ___________________________________________________________________________ 10

Real Time Information (RTI)______________________________________________________________ 10

Full Payment Submission _____________________________________________________________________ 10 FPS Processing ____________________________________________________________________________ 10

Employer Payment Summary (EPS) _____________________________________________________________ 11 The Wizard _______________________________________________________________________________ 11

EPS Processing ____________________________________________________________________________ 11

BACS Submission ______________________________________________________________________ 11

C/B Transfer & N/L Analysis _____________________________________________________________ 11

Update ______________________________________________________________________________ 12

Updating the Current Period ___________________________________________________________________ 12

Checking the Pay Period ________________________________________________________________ 12

P32 Processing ________________________________________________________________________ 13

Payments __________________________________________________________________________________ 13

Funding____________________________________________________________________________________ 14

Employment Allowance_______________________________________________________________________ 14

Apprenticeship Levy ____________________________________________________________________ 15

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Introduction The Payroll module forms part of the HR solution from Pegasus. The module is specifically

designed for employees of your company to calculate individual PAYE & NI. The system

allows you to process the wages for the current period and once the current period has been

updated, it forms part of the history and can never be changed.

The key features of this module are;

• Calculation of Income Tax and National Insurance Contributions

• Calculation of employee payments (including salary sacrifice) and deductions.

• Maintenance and calculation of pensions including National Employment Savings

Trust (NEST) pensions and other auto enrolment pensions. NEST is a ‘low-cost and

easy-to-use’ pension scheme that’s available for any employer to meet their

pension’s auto enrolment duties. Refer to www.nestpensions.org.uk for details.

• Maintenance of calculation of Attachment Orders.

• Maintenance and calculation of statutory payments, including;

→ Statutory Sick Pay

→Statutory Maternity Pay

→Ordinary Statutory Paternity Pay for both birth and adoption

→Additional Statutory Paternity Pay for both birth and adoption

• Trade Dispute Tax Refund withheld

• Retrospective adjustments to National Insurance Contributions

• Full P32 Processing

• Online submission of Real Time Information submissions to HMRC

• Online payslips and P60s (End of Year Certificates)

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Payroll Processing Steps

1. Check Payroll Period An important step to ensure you are processing in the correct period. (Utilities → Calendar)

2. Payroll Processing This step requires that you add all new employees, ensuring all records are up to date and process leavers. Also ensuring that the correct payments to these employees are entered (Processing)

3. Global Calculation This step runs the calculation on all employees and prints any exceptions/warnings for these employees

4. Auto Enrolment Update The above report will inform you of any employees that need postponing or enrolling into the workplace pension. If any employees have been enrolled, then step 3 will need rerunning. (Global Changes → Auto Enrolment Updates)

5. Print Summary Reports & Payslips All required reports to be printed for the period. (Summary Reports → T/P, T/D & Payment Reports → Payslips, Produce & List BACS)

6. FPS & EPS Transmit the RTI Full Payment Submission & Employer Payment Summary

7. BACS Submission This step will call your BACS software. If successfully transmitted, it will delete this period’s BACS file

8. Process Pension Contributions This step will create the pension contribution files. (Pension Reports → Contribution File)

9. C/B Transfer & N/L Analysis These steps will update the N/L and C/B with this periods payments. (Utilities → N/L Analysis & Cashbook Transfer)

10. Update This step updates the current period and writes the information to history. (Utilities → Update)

1. Check Pay Period

2. Payroll Processing

3. Global Calculation

4. AE Update

5. Print Summary Reports & Payslips

6. FPS & EPS (RTI)

7. BACS Submission

8. Process Pension

Contributions

9. C/B Transfer &

N/L Analysis

10. Update Pay

Period

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Ribbon Bar Structure

Processing → Where you will undertake any changes to the employee or their

payment/deduction elements. (See step 2)

Calculation → The routine to calculate the current period’s wages for all employees in the

payroll group – also known as global calculation. (See step 3)

P32 Processing → Allows you to view your outstanding payments to HMRC and record your

payments.

View → Use to analyse gross payments and deductions

RTI Submissions → Functions which allow you to communicate employees and employer’s

payments online to HMRC. (See step 6)

Summary Reports → This section is where you can print audit trails for the current period

and year-to-date. Including in this is a report in the style of a P11 report. (See step 5)

Payment Reports → This section is where you will print payslips and cheques. The BACS and

Autopay listing is also listed here. (See step 6)

Periodical Reports → P45 & P46 reports are printed from this section. Along with this, you

are able to print reports for Statutory Sick Pay, Statutory Maternity Pay, Ordinary and

Additional Statutory Paternity Pay, Statutory Adoption Pay and reports for attachment

orders.

Pensions Report → This section is where you will print details of your employees’ pension

schemes and create the auto enrolment pension enrolment files and contribution files to

send to the National Employment Savings Trust (NEST).

Miscellaneous Reports → Shows birthdays and holidays

EOY/Special Reports → Typically an area which is used at year end to print relevant reports

or to complete activities for year-end.

Global Changes → These are the global updates for payroll;

• Zeroise Payment and Deduction balances

• Tax Code changes

• Payment and Deduction changes

• Pension Scheme Transfer

• Auto-enrolment Updates

Email Admin → Allows you to maintain employee’s email details and design/generate

correspondence to these employees.

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Payroll Processing The Payroll Processing function is where you will enter the relevant details of your

employees such as tax code, NI number etc. and enter their payments and deductions.

Employee Record

Employee’s Payments

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Payroll Processing Actions Within Payroll Processing you will be able to undertake the following;

• Include Historical → Using this will include your historical employees in the list

• View History → Previous period records and payslip images

• Details & Bank → Which includes their bank details and home address

• To Date → Includes previous employment figures, gross pay, tax and NI for the

current year

• Payment & Deductions → Under the ‘Payments’ tab, you can see the details of each

payment. Under the ‘Deductions’ tab is where you can see the details of each

deduction. Both shown are for the current period you are processing.

• Pensions → Within the Pensions form, you can view the pensions the employee has

and the amounts the employee and company have paid in.

• Attachment Orders → Use the Attachment Orders command on the ‘Action’ menu

associated with the Payroll Processing form to maintain details that enable the

application to calculate deductions for one or more Attachment of Earnings Orders

for the employee. When using this function, you will need to set up a deduction

profile for the appropriate type of Attachment of Earnings Order before you can

create a deduction. An Attachment Order is issued to an employer by an authority

telling them to make a deduction from an employee via the payroll – this is a legal

requirement. On each payday, you must make the deduction provided the

employee’s earnings for the pay period are sufficient. The use of Attachment Orders

is favoured by the Government for the recovery of debts, fines and liabilities. There

are many different types of attachment orders which can be issued by different

courts, agencies and authorities.

• Leavers → Use this facility to mark an employee as a leaver. Either leaver this period

(last period) or leaver already left (no more pay)

• Holiday → To record that the employee has taken some holiday days in the current

period. (This will reduce the amount of days remaining to the employee)

• Transfer → If you have multiple payroll groups, you can use this function to move an

employee to another group.

• Absence → If the employee has taken absence days in the period you can record

them here.

• Statutory Payments → How statutory payments are calculated depends on whether

these options have been selected in the Payroll – Utilities – Set Options command.

Before statutory payments are calculated, payment profiles must be created for the

type of statutory payment. See the Payroll – Maintenance – Payment Profile – Help

(F1) for more information.

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Payments and Deductions Within Payments & Deductions, you can define which payments and deductions are

repeated for each pay period, unless overridden. Once you have set up each employee’s

payments and deductions, you only need to make the changes that are necessary on a

period-by-period basis. The application automatically calculates pay on all payments and

deductions you have chosen to repeat each period.

Payments & Deductions

From the ‘Action’

menu, you can add

new items for that

particular employee by

selecting ‘Add Item’.

Payments are set up

under the ‘Payments’

tab and deductions are

set up under the

‘Deductions’ tab.

Perm. Value → A ‘Permanent’ value to be repeated each pay period. Although described as

‘Permanent’, you can change it at any time. You can override it for a given pay period by

making an entry into the ‘Temp’ value field or update it by using the Global Changes

command on the EOY/Special Reports menu. An example of use for a permanent payment is

a salary.

Temp. Value → A temporary value you want to use for the current period only. You can use

this to override the value in the Perm. Value field or for the occasional payment such as one

off expenses.

Units → The number of hours for the rate, or in the case of SSP (Statutory Sick Pay)/SMP

(Statutory Maternity Pay), units are the number of days. If payments are made on the basis

of the number of hours worked, you can enter the number of hours each pay period. If the

‘Retain Units’ option is selected on the ‘Payment Profile’ form for the payment concerned,

the units are retained and displayed as a default in the subsequent periods. For example,

you might want to retain a standard number of working hours for a basic pay element, while

leaving overtime elements open without a default. Fractions of hours are treated as either

minutes or decimals according to the selection in the ‘Hours and Minutes’ option on

‘Options Page 2’ tab on the Set Options form.

Rate → The rate per unit. This only applies if you have made an entry in the ‘Units’ column.

Pay is calculated by multiplying the units by the rate.

Description → The name of the profile.

T.P → This column will display the value of ‘This Period’ of the current period once a

‘Calculate’ has been run. These figures may not be accessed.

T.D.L.P → The cumulative value of all payments for the profile for the pay year-to-date, as at

last period. You can change the value in this box, but this should only be done before you

use the ‘Calculation’ command and when you are creating a new payroll part way through

the pay year.

T.D.T.P → This column will automatically display ‘To Date This Period’ figures after a

calculation is run and may not be accessed

Note – Employee pay records are not updated with the payments and deductions you define

until you use the Calculation command.

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R 1.1 9 Payroll Processing

Calculate To check an employee’s total payments and deductions in the current period, you can use

the ‘Calculate’ option’ from the ‘Action’ menu.

Calculate

This will show you a summary and calculate the net

pay. This function can be completed from the

‘Payment & Deductions’ form or the Employee

Record.

Note – You don’t need to run this function but you

do need to run the Global Calculation on the main

menu every period.

Global Calculation The Global Calculation routine is mandatory and must be ran each period. (See Step 3 on the

Payroll Processing Steps). When the Global Calculation is run, you must confirm the payment

date.

Calculation Payment Dates

In regards to the payment dates,

you must ensure that the ‘Actual

Pay Day’ doesn’t fall on a

weekend or a bank holiday.

Once you have proceeded to

select ‘OK’, an

exceptions/calculation report will

be produced.

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Calculation Report The calculation report can include changes or details that should be checked for individual

employees. These can include New Starters, a Statutory payment to an employee etc.

Calculation Report

Real Time Information (RTI) This is information filed with the HMRC for the current period. See the ‘RTI’ guide for further

information.

Full Payment Submission Real Time Information submission can only be sent in the current tax year once the ‘Use Real

Time Information’ option on the Payroll → Utilities → Set Options form has been selected.

This submission includes pay details for the pay period. For example – payments, income

tax, NI and other deductions such as student loans. The submission also includes details of

new starters and leavers this year and employees who have irregular payment patterns. The

first FPS is also used to align your employee data with HMRC records.

HMRC will expect you to send at least one FPS per month and on the same day you pay your

employee’s. You will be informed via ‘Generic Notification Services’ (GNS) if an FPS has not

been received. The GNS is part of the Data Provisioning Service (which is used to notify you

of tax code changes, for example).

FPS Processing Select the Full Payment Submission from the ‘RTI Submissions’ and follow the wizard

through without changing any options unless you are late filing the report.

→ Select ‘Start’ and print/spool report

→ Select ‘Yes’ to all the prompts and select ‘OK’ to the confirmation

→ Answer ‘Yes’ to the question about submitting now

→ Follow the Online Filing Wizard to complete the submission

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Employer Payment Summary (EPS) This submission is used to reduce the charge calculated from the most recent FPS

submission. The EPS is also used to notify HMRC if no employees are paid in a pay period

meaning Income Tax, NI and other deductions such as Student Loans are not due. If this is

your first EPS for the year, the year to date figures for any recovered payments for statutory

payments, CIS Deductions and NICs are also included. The Apprenticeship Levy uses the EPS

to notify HMRC of the amount that is due. The figures are year to date and will include your

‘Annual Allowance’ and ‘Levy Due’.

The Year-To-Date recoverable amounts displayed on page two are derived from the Payroll –

P32 Processing form. If you operate more than one payroll company using the same

Accounts Office Reference, the EPS must be sent from the consolidated P32 Company. (This

is defined in P32 Co. Consolidation box on the Payroll – Utilities – Set Options form).

The EPS must be submitted before payment to HMRC which is due on the 19th of the

following tax month.

The Wizard The Employer Payment Summary wizard is designed to enable the file for submission to be

quickly created before it is submitted to HMRC using Pegasus Online Filing Manager.

EPS Processing Select the Employer Payment Summary from the RTI Submissions and follow the wizard

through without changing any options unless you are late filing the report.

BACS Submission If you are paying your employees via BACS, you will need to produce an output file from

Pegasus for your BACS software to import to ensure all your employees are paid the correct

value.

Select Produce & List BACS from ‘Payment Reports’. By selecting this, it will print/spool a

report listing all employees’ payments and produce a file for your BACS software to import.

In your BACS software, import the file that has just been produced and check values against

the report created.

C/B Transfer & N/L Analysis If you link your Payroll module to your Nominal Ledger and/or Cashbook, you can now run

the routines to update these modules.

N/L Analysis → From within Utilities, select ‘N/L Analysis’. Select ‘Create Transfer File and

Report’. Select ‘OK’ and print/spool the report.

C/B Transfer → From within Utilities, select ‘Cashbook Transfer’. Select ‘Update Cashbook

and Create N/L Transfer File’. Select ‘OK’ and print/spool the report.

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Update The Update routine is used for closing the current period and opening the next period. Once

the period has been closed, no changes can be made to it.

Updating the Current Period Before starting, make sure no Payroll related forms are open.

From within ‘Utilities’, select ‘Update’. If you need to clear down the currently due figure for

any pension schemes, you should select them now. (Click on required pensions).

A series of prompts will now be displayed, read each one and answer the questions

displayed. (If you select ‘No’ to any question, the function will terminate).

The system will now update all employees’ ‘To-Date’ details and attach a copy of this

period’s payslip to their history.

Once completed, select ‘OK’.

Checking the Pay Period It is imperative that you know you are processing in the current period, so we recommend

that you check what period you are currently in.

From Utilities, select ‘Calendar’. This will show you the current period and if you have run

the ‘Global Calculation’ for this period. (Actual Pay Date will have an entry).

Calendar

You can also check which Pay Period you are in by selecting ‘Pay Period’ from the Utilities

menu.

Pay Periods

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P32 Processing The P32 is the ‘Employer’s Payment Record’ and is used to help calculate and record how

much an employer owes the HMRC per tax month. The information is derived from the

calculation of the Payroll. Based on information derived from the calculation of the Payroll,

the P32 Processing form provides the means to view, maintain and print P32 Employer

Payment Record information. When you select the P32 Processing command, the

application displays the P32 form which displays the P32 records for the current tax year. For

two and four weekly payrolls, weeks 54 & 56 are included in the week 53 line.

P32 Form

From the ‘Action’ menu, you have the following routines which allow you to keep your P32

up to date.

Payments Monthly HMRC payments should be recorded each month using the Payments routine. Here

you specify the month you are paying along with the value, reference and date paid. To

record a new Payment, you should select the ‘New’ icon from the toolbar (Ctrl+N) and select

the relevant period and save once you’ve entered all the details.

Payments

Once you have recorded the details and

saved, the system will update the amount

owing for each month as can be seen in

the ‘P32 Form’ above.

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Funding If you have applied for and received funding in respect of a TAX or Statutory Payment

refund, you can record this refund using this routine.

Funding

Employment Allowance When taking your NI allowance, you can record which month or months it has been claimed

in by using this routine. It will be shown and reduce the amount needed to be paid

automatically.

Employment Allowance

It is imperative that these records are maintained as this information is used in the EPS

submissions.

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Apprenticeship Levy The Apprenticeship Levy was introduced in April 2017. Employers who have a pay bill over

£3 million each year would be required to pay the apprenticeship levy. You report and pay

the levy to HMRC through the PAYE process. Every employer will have a £15k allowance for

each tax year. (If an employer has more than one company, this allowance should be spread

across all the companies). The allowance is spread equally across the year. The

Apprenticeship Levy can be found in P32 Processing from the ‘Action’ button. By selecting

‘Apprenticeship Levy’, it will show you by month the levy earnings and levy due.

Apprenticeship Levy

To report to HMRC how much levy is due, you must send an EPS each month. On the second

page of the EPS is where the Apprenticeship Levy is located. It includes the annual allowance

and the Levy due. (YTD figure).

EPS

When you come to record the payment for each month in P32 Processing, you will now see

that the amount will include the apprenticeship levy which should be paid to HMRC.

Payment