1. Administering Payroll for the United Kingdom
  2. Create PAYE Component Details

Create PAYE Component Details

The PAYE component details capture information used to calculate deductions and report PAYE-related information to HM Revenue and Customs (HMRC). You create PAYE component details on the Person Details page (Calculation Cards task).

These sections identify the types of PAYE component details you can create and describe when you should create

each type.

Pay As You Earn Component Details

The application creates this detail record when the Statutory Deductions calculation card is created. It captures information used to calculate deductions and report on payments. Most fields are self-explanatory. This table provides help for some key fields:

Field

Value

P45 Action

Indicates when to issue a P45. See Related Topics for more information.

Number of Periods Covered

Defaults to 1, indicating the employee is paid regularly, such as weekly or multiples of weeks. If employee is paid in advance or arrears for multiple periods, enter the number of periods.

If you set this to any value other than 1, the Full Payment Submission (FPS) process resets it back to 1 when it updates the employee record (after prepayments have been run).

Number of Hours Worked

Select the number of hours the employee normally works in a week. For occupational pensioners, select Other.

Report NI YTD values

Indicates whether aggregated NI year-to-date values for all PAYE components on the card should be reported against this PAYE component in the FPS. This option must be selected on one and only one PAYE component at any time. Otherwise, the payroll run and the FPS process will fail.

Irregular Employment Payment

Select if the employee isn't paid regularly, is on maternity or extended sick leave, or won't be paid for 3 months or more.

One-Off Payment

Select for one-off payments to employees whose date of leaving was included in a previous Full Payment Summary submission.

Payment to a Non-Individual

Select for payments to a body such as a Personal Representative, Trustee or Body Corporate.

Unpaid Absence

Select if the employee's pay in this pay period has been reduced due to an unpaid absence.

On Strike

Select if the employee's pay in this pay period has been reduced due to being on strike.

Previous HMRC Payroll ID

Indicates whether the change in the ID has been reported to HMRC.

Employment filed with HMRC

Indicates whether the FPS process has reported the start of this employment to HMRC.

These rules apply when creating PAYE component details:

New Starter Declaration Component Details

If you've selected the option Enable automatic PAYE tax code updates in the organization Statutory Deductions calculation card, the tax code is updated according to the tax year legislative rules. The application triggers this when the employee submits the New starter Declaration form

The updates performed also depend on other data:

  • If no P45 is provided, update to tax code and tax basis is performed.

  • If a P45 is provided, no update to tax code is performed, and tax basis is done as the P45 takes precedence.

Create this component detail record to capture new starter information. This table describes some key fields:

Field

Value

Statement

Select the new starter declaration statement.

Do you have a student or postgraduate loan

Select the appropriate response.

Repaying student or postgraduate loan direct

Select the appropriate response if paying the loan by direct debit.

Plan Type

Indicate the appropriate plan type, whether Plan 1, Plan 2, or Both.

Finished studies before the last 06 April

Indicate Yes or No

P45 student loan deductions to continue

Select this option if:

  • A new employee gives you a P45 with a 'Y' marked in Student Loan deductions to continue'.

  • A new employee tells you that they have an income-contingent student loan to repay, as part of the new starter questions

P45 not paid before tax year end

Select if this employee won't be paid from the start of their employment until the next 5 April.

Filed with HMRC

Indicates that the new starter information was filed with HMRC. This is updated automatically by the Full Payment Submission (FPS) process.

Employee declared

Indicate whether the employee completed the new starter declaration

Pensioner Notification Component Details

Create this component detail record when the employee becomes a pensioner. Record the annual pension and the date the pension started. The FPS process updates the Filed with HMRC field automatically.

Expatriate Notification Component Details

Create this component detail record when a new starter or existing worker who has expatriate status. Here's a table that describes some key fields:

Field

Value

EEA Citizen

Select if the employee is a citizen of the European Economic Area.

EPM6 Scheme

Select if the employer operates a modified scheme as defined in the Employment Procedures Manual Appendix 6.

Filed with HMRC

Indicates that the expatriate status was filed with HMRC. This is updated automatically by the Full Payment Submission (FPS) process.

Rules to Create Component Details

These rules apply when creating PAYE component details:

  • Creation Sequence. The order in which you can create these component details is restricted as shown here:

    1. Pay As You Earn

    2. New Starter Declaration

    3. Expatriate Notification

    4. Pensioner Notification

  • Precedence. You can't create or edit a PAYE component detail if a component detail of a higher precedence already exists.

  • Hierarchy. All component detail records are children of the parent PAYE component. Only one instance of each component detail is allowed per PAYE component. The effective start date of each component detail is the effective start date of the parent PAYE component. You can't make date-effective updates to a new starter record; you can only make corrections.