Individual employees affected

• Are there any net payments setup? >

  An incorrect tax rebate generates if you only pay any employee through a net payment rather than paying net to gross.

• Are records updated for all previous periods? >

• What's the taxable gross pay? >

• Are you advancing pay? >

  Advancing pay, for example over a holiday period, ensures that PAYE and NI are correct over the whole period. If you advance pay incorrectly, PAYE allowances are wrong, resulting in incorrect tax. 

  To check:

  1. Click Enter Payments, then Advance Pay.
  2. Check Periods to Advance.

  You can only advance full pay periods. For example, if you advance a weekly employee for one week this should say 1.

• What's the employee's tax code? >

  An incorrect tax code affects the tax calculation. To check:

  1. Double-click the relevant employee, then click the Employment tab.
  2. Check the Tax Code.

  Ensure that the Week 1 / Month 1 Basis check box is only selected when required.

• What's the employee's pay frequency? >

  An incorrect pay frequency is likely to give an employee the wrong tax allowance. For example, a weekly paid employee set to monthly gets the free pay allowance for the whole month. To check:

  1. Double-click the relevant employee, then click the Employment tab.
  2. Check the Payment Frequency.
• Have YTD values been manually entered? >

  If you start processing payroll in Sage 50 Payroll part-way through the tax year, you need to enter YTD values. These cover any pay periods before you starting to use Sage 50 Payroll. If you haven't done this, or they're incorrect, the tax isn't correct. To check:

  1. Double-click the relevant employee, then click the Employment tab.
  2. Click YTD Values.

  
  

  
  

  For more information on entering year to date values, visit the employee year to date values guide.
  If you've updated records since entering YTD values, use the P11 to check the B/F values entered. Click Reports then click the Employee category. Run the P11 Deduction Card (PAYE Details) report.

  
  

  
  

• Did you enter the P45 information correctly? >

  If an employee gives you a P45 for the current tax year, you need to enter it to Sage 50 Payroll. To check this:

  1. Double-click the relevant employee, then click the Employment tab.
  2. Click YTD Values.

  The Previous (P45) Employment column shows the values from the P45 in the Gross Pay for Tax and Tax Paid rows. For more information on entering P45 values, visit our how do I enter a P45 for a new starter guide.

All employees affected

• What's the current process date? >

  The processing date determines which tax week or month you're giving tax allowances up to. To check:

  • Click Payroll, then Change Process Date
• Have you updated records for all previous periods? >

  As tax calculates cumulatively, any missing periods affect the tax calculation for subsequent pay periods. To check this, use one of the following options:

  • Open the employee Record, then click the History tab
  • Click Reports then the Employee category. Run the P11 Deduction Card (PAYE Details)

  Check there are no periods missing incorrectly. If there are, you need to correct this before continuing. Restore or rollback, and reprocess any missing periods and any subsequent periods.

• Are the payments and deductions subject to tax? >

  When you create pay elements, you specify whether or not they're subject to PAYE. If you set this incorrectly, PAYE may be incorrect. To check:

  1. Click Company then Pay Elements.
  2. Click the Payments or Deductions tab as required.
  3. Select relevant payment or deduction and click Edit.
  4. Check that the PAYE check box is selected or cleared as required for this payment or deduction.
• Is the software version correct?

  If you're not using the correct software version for the tax year, then the PAYE legislation settings are likely to be incorrect. 

  To check the version, click Help then About.

• Are the PAYE bandwidths set correctly? >

  PAYE bandwidths are included in your software, however they can be manually amended. You must not amend these bandwidths unless advised by Sage or HMRC.

  If the incorrect legislation is used and any updates have been processed with incorrect legislation, either:

  • Restore or roll back, amend the legislation then reprocess
    Or:
  • If all employees are on a cumulative tax code, amend the legislation now and in the next period the tax recalculates cumulatively. If any employees are on a W1/M1 tax code and won't be moved onto a cumulative code within the tax year, you must restore a backup and reprocess using the correct legislation or rollback these employees as the tax paid to date is incorrect and won't recalculate