Payroll Calculation

Use the Calculation command to calculate the payroll for the current period for all employees. If you are using groups, you can run the calculation for one or more groups or all groups in the one process. For each group, you can override the default actual pay date which is derived from the usual pay date for the period defined on the payroll calendars. Payroll calendars are defined using the Payroll - Utilities - Calendar command.

Important: If a system error occurs during the calculation for the whole payroll or for selected payroll groups, you must re-run the calculation again.

The procedure calculates the following for each employee:

• Individual payment values (including salary sacrifice) using each employee's payments defined on the Payroll - Processing - Payments & Deductions form.

  You can set up value-based salary sacrifice payments for employees who agree to give up some of their contractual cash pay in return for non-cash benefits. Value-based salary sacrifices can be set up either for a pension contribution or for other types of contribution, for example child care vouchers or the Cycle to Work scheme. When Advanced Pensions Processing is in use you can also set up percentage based salary sacrifice pension payments so that salary sacrifice payments are calculated automatically.

  This can be financially beneficial to both you the employer and also to the employee because of lower Income Tax and National Insurance contributions. If the employee's pay is subject to an attachment order you should contact HMRC to check whether their attachable pay is affected.

  This is not a deduction from pay but rather an agreement to give up part of cash pay in return for non-cash benefits. They are displayed as a negative payment (not a deduction) on both the Payments tab of the Payroll - Processing - Pay & Deductions form and on the employee's payslip.

  For details of salary sacrifice arrangements including how statutory payments and leave can be affected, please see www.hmrc.gov.uk/payerti/payroll/special-pay/salary-sacrifice.htm.

  For the steps to set up automatically calculated salary sacrifice payments in Opera 3, see the Setting Up Salary Sacrifice for Pensions and Setting Up Non-Pension Salary Sacrifice Help topics.

  This feature is available in Opera 3.

• Individual deduction values using each employee's deductions defined on the Payroll - Processing - Payments & Deductions form.

• Statutory payments - Statutory Maternity Pay, Statutory Sick Pay, Statutory Adoption Pay, Statutory Paternity Pay, and Shared Parental Pay. The standard rate for the statutory payments and other parameters that affect how the payments are calculated are detailed on the SSP and Other Stat. Payments tabs of the Payroll - Utilities - PAYE/NI/Stat. Payments form.

• Statutory deductions such as PAYE and National Insurance:

• • The tax and NI rates and thresholds that affect how the deductions are taken from the Payroll - Utilities - PAYE/NI/Stat. Payments form

  • Tax deductions are limited to the Tax Regulatory Limit % setting on the Payroll - Utilities - Set Options form.

• Deductions for attachment orders

• Assessment of their pensions auto enrolment category based on their qualifying earnings. Qualifying earnings for auto-enrolment refers to an employee's relevant earnings between the Qualifying Earnings Lower and Upper Thresholds (defined by The Pensions Regulator/The Department of Works and Pensions). Opera uses payment profiles (defined on the Payroll - Maintenance - Payment Profiles form) with the Auto Enrolment box selected when calculating qualifying earnings.

• Pensionable pay and contributions for relevant payments profiles with the Pensionable box selected (defined on the Payroll - Maintenance - Payment Profile form).

• Total gross pay

• Total taxable and NI’able pay

• Net pay.

Each employee's To-date values are then updated with the current period’s calculation results.

Details used to calculate pay

The main sources of information are as follows:

• The Payroll - Utilities - Set Options form.

• The PAYE, NI, and Statutory Payments rates and thresholds from the Payroll - Utilities - PAYE/NI & Statutory Payments form.

• The Scottish Rate of Income Tax (SRIT) from the Payroll - Utilities - Scottish Tax form.

• The Payroll - Utilities - Calendar form. The application determines the current payroll period number and then updates the calendar for each group processed with the actual pay date.

• Employees’ records and to-date information, including statutory payments and pensions.

• Employees’ current payment and deduction information for the current period.

Once the calculation has been completed, you can print the payroll reports and most will reflect the current period’s pay and to-date values. You will also be able to print out employees’ payslips. After the calculation has been completed, we recommend you review the reports to check for anomalies.

Calculating pay for individual employees

If necessary you can correct errors or omissions to one or more employee’s records and then carry out a calculation for them only before the final payroll reports and payslips for the period are printed. Individual calculations are done using the Payroll - Processing - Calculate form.

Important: Run the global calculation for all employees. Only run the individual calculation for changes to an employee's pay as and when necessary.

Pension contributions

If the Use Advanced Pension Processing option on the Options Page 2 tab of the Payroll - Utilities - Set Options form is selected, the calculation will also deduct pension contributions for each employee who is a member of a pension scheme.

For more information about setting up pension, see the Pensions Help file.

Employees reaching state pension age: The calculation report will include a note if an employee has reached their state pension age.

If the employee wants to continue paying pension contributions then you don't need to change anything.
If they don't want to pay further pension contributions you must zero their contributions on their employee record:
- if Advanced Pension Processing is used - use the Payroll - Processing - Pensions - Employee Pensions form
- if Advanced Pension Processing is not used - use the Payroll - Processing - Pay & Deductions form.

Employees who are under 21

P32 information

The calculation calculates the P32 transaction information so that you can use the P32 Processing command. Where consolidation is being used, the consolidation company extracts P32 records from all linked companies.

Retirement age checks

The exceptions report that is displayed after the calculation completes includes these warnings for female employees over the pension age:

• Whether an employee's NI code is either C or X.

• Whether a pension contribution has been calculated even though the employee is over retirement age.

These warnings are reported so that you can correct the employee's record if relevant.

Category letter C is used for employees who are over the state pension age. There are only three circumstances when you use category letter X:
- for employees paid below the Lower Earnings Limit for every pay period (for example, employees who are under 16 years old).
- for pension-only schemes
- for workers from abroad.

Audit report

The audit report provides detailed information for the calculation. The report includes payroll-wide warnings that you should be aware of, plus warnings, reminders and notes for individual employees.