Summary
Description
This article will explain each of the options in an employee record.
Before you process a pay run, you need to make sure:
- You have created a record for each of your employees
- The information on each employee record is accurate and up to date
Resolution
Access the employee details
- Within Sage payroll, select the Employees tab.
- Make sure the Employee Details tab is selected.
- If you make changes to any of the details in the record, select Save.
Contact Details >
This section contains the:
- Full postal address
- Telephone number
- Email address
NOTE: An email address is required if you want to use Sage HR Essentials or email payslips.
If you want to email payslips:
- Include their email address and set a password.
- Send the password to the employee. They will need it to view any payslips you send them by email
After you complete all relevant fields, select Save.
The new employee now appears in your list of employees.
If you need to take further action to make the employee active, it will show in the status column. If an NVR response message appears, this may be due to an issue with the employee’s NI number.
Employment Details >
Current Tax Details >
This section contains:
| Tax code | In the 2024/2025 tax year the basic tax code is 1257L |
| Week1/Month1 | Tax codes with a W1 or M1 suffix ignore accumulative values. The tax calculates using the gross pay for the current period only. The tax allowance is for the first week or month of the tax year, regardless of the actual tax period. |
| Ni category | An employee pays national insurance (NI) contributions to qualify for certain State benefits. Read our article National Insurance (NI). |
| On Trade Dispute | Select this if there is a dispute with the employee. This doesn't prevent the employee being paid. It will flag up as a reminder during the pay run, at the Edit Pay stage. |
| RTI Pay ID | Every employee has a unique employee reference for your company. It's included in submissions to HMRC. The payroll assigns unique reference numbers to all new employees. What if I'm transferring from another payroll system? Leave the RTI Pay ID blank Enter the RTI Pay ID from your old system Contact the HMRC Employer Helpline (opens in new tab) and ask for the employees RTI Pay ID. |
| Directorship Details | If the employee is a director of the company, select the Is a Director check box. |
| Directorship Started | Specify whether the employee became a director in a previous tax year, or during the current tax year. If the directorship started in the current tax year, you must also specify the start date. |
| Preferred Calc Method | You can calculate Directors’ NI in two ways. Each method gives the same NI liability amount at the end of the tax year. NI payments within the tax year can vary under the two methods:
|
To change your employee from a director to a standard employee you will need to edit the employee record. Go to the Employees tab and click on the relevant employee record. Under Directorship Details clear the Is a Director checkbox.
After you complete all relevant fields, select Save.
TIP: The employee NI will calculate on a cumulative basis until the end of the current tax year. Next tax year, the NI calculation method will revert to Per Pay Run.
Previous Tax Details >
This section is used when:
- You have a new starter
Read our article Add a new employee - An established employee brings you a P45 from the current tax year
- HMRC informs you of an employee tax code change (P6 or P9)
If your new employee has a P45, you will use the section Employee Declaration: P45
If your employee has no P45 you will use section Employee Declaration: P46
If you're unsure what to use when creating a new employee, you can use the HMRC online tool (opens in a new tab)
| This is an existing employee | Select this option if you are setting up an employee who already works for you and you pay them in the normal way. For example, if you’re setting up for the first time, you need to set up your existing employees. |
| Employee Declaration: P45 | Select this option if the new employee has presented a P45 Part 3 issued by their previous employer. Then choose one of the following options:Circumstance AUse this if it's the employee’s first job since 6 April and they have not received any of the following:
Circumstance BUse this if it's the new employee’s only job, but since 6 April any of the following apply:
This also declares that they do not receive a state or occupational pension. Circumstance CUse this if the new employee:
|
| Employee Declaration: P46 | Select this if the new employee doesn’t have a P45 from their previous employer. Then choose one of the following options: Use this if it's the employee’s first job since 6 April and they have not received any of the following:
Put the employee on a 1257L tax code. Circumstance BUse this if it's the new employee’s only job, but since 6 April any of the following apply:
This also declares that they do not receive a state or occupational pension. Use the tax code 1257L on a 'Week 1/Month 1' basis. Circumstance CUse this if the new employee:
This applies tax code BR. This means there is no free pay allowance and gross pay gets taxed at 20%. Use the tax code BR UnknownUse this if you don’t have enough information on the employee to complete a P46. This applies tax code 0T on a Week 1/Month 1 basis with no free pay allowance. Tax calculates as normal, at 20%, 40% or 45% depending on the employee’s earnings. Employees must contact HMRC so the correct tax code can be issued.
|
Depending on the Start Basis you chose, enter the following details:
| NI Category | The employee’s National Insurance category. You must specify this for new employees. The letters are A, B, C, J, H, M and Z. See the gov.uk site for more information about child employment (opens in a new tab) |
| Tax Code | The tax code determines the tax allowances your employee gets. You must enter this if the employee already works for you or has presented a P45 Part 3. If the new employee does not present a P45, they must complete a P46. This says which tax code they should be on. |
| Leaving Date | The date the employee finished their previous employment. |
| Week 1/Month 1 | If your employee’s tax calculates on a week 1 / month 1, or non-cumulative basis, select this check box. This bases the tax on their pay in the current period, instead of cumulative for the full year. |
| Final Pay Period | The week or month of your employee’s final pay run in their previous employment. |
| Total Pay to date | The total amount of pay your employee has received in the tax year to date, if any. You can get this from their P45 Part 3. If they are set to Week 1/Month 1, set this value to zero. |
| Total Tax to date | The total amount of tax paid by your employee in the tax year to date, as specified on their P45. If they are set to Week 1/Month 1, set this value to zero. If they are not set to Week 1/Month 1, Payroll calculates their total tax liability for the tax year to date based on:
The calculated value should agree with the P45 Part 3. If the values don’t agree, the Calculated P11 Tax appears. This specifies the calculated value. The calculated value adds onto the P11. It's then used for tax calculations, rather than the value on the P45. |
| Student loan | Select this if the previous employer deducted student loan repayments. |
Related Solutions
- What to do if your Employee left the company but has now come back
- Is the employee under 16? Read our article When should I use Insurance Category M?
- Employee working patterns, read our article Working patterns
- Set up employee pensions, read our article Auto Enrolment Pensions
- Employee records and GDPR information. Read our article GDPR personal data within an employee record
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