HMRC's guidance requires that you must calculate PAYE and NI due 'when you actually make the payment'. This is when employees receive their money. To do this in Sage 50 Payroll, simply set the process date to the date the employees actually get paid.  TIP: Go to Gov.UK for further information.
What does this mean? Full payment submission (FPS) Under RTI, the deadline to submit your Full Payment Submission (FPS) is on or before the date you pay employees. When you process a pay run and update records, your software saves your process date as the payment date for that pay run. Your software includes this date in each FPS, and you must submit your FPS on or before this date. If you submit it after this date, you need to select a reason the submission is late while you submit it. Non-banking days If your employees' pay date falls on a non-banking day, you still need to use your regular process date. Visit our paying your employees over bank holidays article to find out more.
My process date is different to my pay date You need to start using the date you pay employees as your process date from the next period you process. Sometimes, changing your pay date can cause a missing a tax period, or stops you from being able to update a period. If this happens, follow the Align your process date to the payment date section below.
Align your process date to the payment date Aligning your process date to your payment date can mean you miss a tax period, or need to process an employee twice in one period. If the process date and the date your employees receive their money are in different tax periods, you must correct this before your next FPS. There are two scenarios that could result in this happening when you move your process date: You make 11 payments in 12 periods You have too many tax periods compared to payments. This results in a missed tax period.  NOTE: If the employee earns over the lower earnings limit (LEL), you must adjust the employee's year to date (YTD) LEL figures. This is to ensure the employee has the correct LEL value for all periods.
If the employee's earnings are below the LEL, you don't need to increase the LEL values. You make 13 payments to your employees in 12 periods You have too many payments to fit into the number of tax periods. This results in you not being able to process a period. To resolve this, you need to process the payments for two pay periods in a single payment. To find out more and view examples, continue to the Examples and scenarios section.
Examples and scenarios Below are some examples with more information about what to do if one of the above scenarios affects you. Changing your pay date to match your payment date means you miss a tax period ▼ Monthly paid example If you miss a tax period, process payroll as normal and ignore any warnings about missing a tax period. Then, before you submit the FPS, manually increase the Earnings up to LEL value in the employees' records, by the relevant monthly amount. In the 2024/2025 tax year, this is £533. For example, you process your payroll and set your process date to 2 August, month 4, but pay your employees on 6 August, month 5. As you need to change your pay date to 6 August, month 4 will be missing. To resolve this, set your pay date to 6 August, process your payroll and update records as normal, ignoring any missing tax period warnings. Don't submit the FPS yet. If the employee earns above the LEL, manually increase the employees' Earnings up to LEL values by £533. You don't need to amend the LEL value for any employees earning below the LEL. If you need to increase your employees' Earnings up to LEL: - Select the relevant employee on your list.
- Click Employee then Employee Record.
- Click the Employment tab, then select the YTD Values button.
- Click the NIC tab.
- Manually add the relevant value to the Earnings up to LEL box.
- Click Save then click Close.
- Repeat for each employee until you've updated them all.
You can then submit your FPS for this period. From the next pay period, you can continue to process using the correct pay date. Employees with a director status of Director are unaffected as their NIC calculates cumulatively and not on a period basis. If you miss or advance a tax period for a Director, the NIC calculates correctly based on the yearly NIC thresholds. ▼ Weekly paid example If you miss a tax period, process payroll as normal and ignore any warnings about missing a tax period. Then, before you submit the FPS, manually increase the Earnings up to LEL value in the employees' records by the relevant amount: - Weekly - £123
- Fortnightly - £246
- Four Weekly - £492
For example, you process your payroll and set your process date to a Monday but pay your employees on the following Friday. Set your process date to when you pay the employees, which in this example is Friday. Taking the 2022/2023 tax year for instance, Monday and the following Friday are in different tax weeks. You're about to process your week 10 payroll and want to align your process date to the pay date. You normally set your process date to Monday 13 June, and pay your employees on Friday 17 June, week 11. As you need to change your pay date to Friday 17 June, tax week 10 is missing. To resolve this, set your process date to Friday 17 June, process your payroll as normal and update records. Before you submit the FPS, manually increase the Earnings up to LEL in each employees' record by the relevant value, as mentioned above. In this example, you pay the employees weekly, so you increase it by £123. To increase each employee's Earnings up to LEL: - Select the relevant employee on your list.
- Click Employee then Employee Record.
- Click the Employment tab, then select the YTD Values button.
- Click the NIC tab.
- Manually add the relevant value to the Earnings Up To LEL box.
- Click Save then click Close.
- Repeat for each employee until you've updated them all.
You can now submit your FPS for this period. Continue to process using the correct process date from the next pay period. Employees with a director status of Director are unaffected as their NIC calculates cumulatively and not on a period basis. If you miss or advance a tax period for a Director, the NIC calculates correctly based on the yearly NIC thresholds. Changing your pay date means that you can't update a period ▼ Monthly paid example You set your pay date to the 6th of the month but pay your employees the day before, on the 5th. You need to move your pay date to when you pay the employees, which is the 5th. However, the 5th and 6th are in different tax months. For example, you set your process date to Wednesday 6 July, tax month 4, and pay your employees on Tuesday 5 July, tax month 3. You can't move your pay date to Tuesday 5 July because you already processed the month 3 payroll, with process date 6 June. To resolve this, because you're processing a tax period ahead, you need to pay two periods in one. This ensures you process correctly from the start of the new tax year. | | Tax month | Process date | Date employees get paid | | A | Month 4 | Wednesday 6 July | Tuesday 5 July | | B | Month 4 | Thursday 5 August | Thursday 5 August | | C | Month 5 | Wednesday 5 September | Wednesday 5 September | - To be able to use Thursday 5 August as the pay date, B, you need to rollback or restore month 4 processed in A. Then, reprocess using Thursday 5 August as the pay date. Include the pay from A and B when reprocessing, processing the employee two months salary. You can then set up a post tax post NI deduction to deduct the salary the employee already received on Thursday 5 July
- If you rollback or restore to reprocess a period, you must submit an FPS adjustment to notify HMRC of the difference
- You can then process month 5, C, and the following periods with the process date set correctly to the 5th of each month
▼ Weekly paid example You set your process date to Wednesday but pay your employees the day before, on Tuesday. Under RTI, you must set your process date to when you pay your employees, which in this example is the Tuesday. However in the 2022/2023 tax year, Tuesdays and Wednesdays are in different tax weeks. For example, you set your process date to Wednesday 20 July, week 16, and pay your employees on Tuesday 19 July, week 15. You can't process Tuesday 19 July because you processed 13 July already, which is within the same tax week. To resolve this, you need to pay two periods in one to ensure you process correctly from the start of the new tax year. For example: | | Tax week | Process date | Date employees get paid | | A | Week 15 | Wednesday 20 July | Tuesday 19 July | | B | Week 15 | Tuesday 26 July | Tuesday 26 July | | C | Week 16 | Tuesday 2 August | Tuesday 2 August | - To be able to use Tuesday 26 July as the pay date, B, you need to rollback or restore week 15 processed in A. Then, reprocess using Tuesday 26 July as the process date. You need to include the pay from A and B when reprocessing this, paying the employee two weeks salary. You can then set up a post tax post NI deduction for the salary the employee already received on Tuesday 19 July
- If you rollback or restore to process twice in one period, you must submit an FPS adjustment to notify HMRC of the difference
- In this example, you can then process week 16, C, and the following periods with the process date set correctly to the Tuesday
|