Pro rata method director on hold over payroll year end

When you process a pro-rata method director, their NI calculates using the annual method in the last period of the tax year.

If you have a director on this method but they aren't paid in the last period, their NI isn't recalculated. This can cause their NI to be incorrect at year end. 

To resolve this:

1. Roll back the director to the last period that they received pay.
2. Open their employee record then click the Employment tab.
3. Click the Director Status drop-down and set this to Director (Annual Basis).
4. Click Save, then Close.
5. Reprocess and update the period. Their NI is recalculated on a year to date basis.
6. If you've sent an FPS for a later period, you can't send an FPS adjustment to notify HMRC of the amendments. Instead, you must wait until 20 April and submit an earlier year update (EYU). Read more >

As a result of the change in the NI contribution for the director, you may need to either make up or recover the difference in net pay. You can do this outside of payroll, or by using a post tax, post NI payment or deduction as appropriate. Re-run your P32 for the tax month so and ensure that you've paid the correct liability to HMRC.

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