Fundamentals of Manual Payroll – Learning Outcomes

Underpinning Knowledge

• Demonstrate knowledge and understanding of the theory of payroll
  • Demonstrate a basic understanding of the law relating to payroll, discrimination, employment status, data protection and confidentiality.
  • Understand and explain the legislation for PAYE and National Insurance Contributions (NICs)
  • Understand and explain the requirements of the Working Time Directive
  • Demonstrate an understanding of the Statutory Minimum Wage
  • Demonstrate an awareness of the legislation concerning the provision of a pension scheme and the different types of pension schemes together with the effect they may have on PAYE and NI deductions
  • Demonstrate understanding of the schedule of submissions to HMRC under the “Real Time Information” (RTI) scheme
  • Understand how a business may receive recompense for statutory payments including the effect of Small Employer’s Relief and when this may be applied
  • Understand what information must be submitted to HMRC and the relevant deadlines that apply

Calculation of Gross Pay

• Demonstrate knowledge and understanding of, and be able to calculate, the various payments that can make up an employee’s Gross Pay
  • Calculate the correct gross pay for each pay period for employees who are paid an annual salary, weekly wage, hourly pay, overtime, piecework and bonuses including statutory payments when appropriate
  • Understand and explain statutory payments of sickness, maternity, paternity and adoption pay
  • Understand the procedures to use when an employee is paid in advance for a period to be taken as paid holiday

National Insurance Contributions

• Show knowledge and understanding of, and be able to calculate through the use of tables the amount of National Insurance Contributions that will be deducted from gross pay
  • Understand and explain the difference between contracted in and contracted out NI contributions
  • Use appropriate tables/calculators to determine the NI contributions for a gross pay figure
  • Using the current legislation, calculate the NI contributions
  • Be able to correctly calculate the NICs for an employee being paid for periods (such as holidays) in advance

Pay as You Earn

• Show knowledge and understanding of the concept of PAYE, together with the use of tax codes to correctly calculate the amount of PAYE to be deducted in a given period
  • Understand how tax codes are calculated and applied
  • Given a tax code to be applied, be able to calculate the amount of free pay that an employee may earn in any given period
  • Determine the amount of pay that is taxable for an employee with a given tax code
  • Determine the correct amount of PAYE to be deducted for a given period
  • Calculate the amount of PAYE to be deducted when an employee is being paid in advance
  • Understand how to deal with notifications of change in tax code issued by HMRC (Forms P6 and P9)

Other Statutory Deductions

• Show knowledge and understanding of other statutory deductions that can be applied to an employee’s pay
  • Demonstrate understanding of the process used to repay student loans
  • Determine the correct deduction towards repayment of a student loan
  • Understand when and how an attachment of earnings may be used

Directors

• Show knowledge of the rules applying to directors in a payroll situation
  • Demonstrate understanding of the requirement for directors NI deductions to be treated differently from ordinary employees
  • Correctly calculate the NI deductions for directors using the “Non-Cumulative” (“Alternative” or “Table method”) and the “Cumulative Director method

Benefits in Kind (BIK)

• Demonstrate a knowledge of the rules regarding benefits in kind
  • Understand the concept of BIK and the impact it has on an employee’s pay and their employer’s costs
  • Calculate the appropriate costs and deductions for tax purposes when an employee is provided with the following benefits by their employer: company car, private fuel, loan, private health insurance, other common basic benefits assuming all required details are provided
  • Understand how to complete all relevant forms with details relating to the above benefits and the deadlines by which they must be submitted
  • Understand the relevant of payrolling benefits in kind
  • Understand the effect of recovering tax due through a change of tax code

Construction Industry Scheme (CIS)

• Demonstrate a knowledge of the rules governing the payment and deductions that apply to contractors and sub-contractors within the Construction Industry
  • Understand and explain the basic principles behind the Construction Industry Scheme (CIS).
  • Understand the duties of a contractor to verify subcontractors
  • Correctly calculate the amount of tax to be deducted if applicable
  • Understand how to make appropriate adjustments to payments to HMRC for CIS tax
  • Accurately complete relevant forms at month-end for a contractor and a sub-contractor business in the construction industry
  • Understand the duties of a sub-contractor to submit relevant invoices within appropriate timescales
  • Explain why tax may be deducted at source from such an invoice
  • Understand the different methods of reclaiming tax deducted depending on the legal entity of the business (ie sole trader v limited company)

Use of Payroll Forms

• Understand the use of the various forms that are used within a payroll system
  • Understand when and how to complete a P45 form and where each part should be sent / stored
  • Demonstrate an understanding of how a starter checklist form is completed and used
  • Demonstrate an understanding of the use of form P11 with payments and deductions for directors and regular employees on various payment schedules, statutory requirements and with differing tax codes including when payments are being made in advance
  • Accurately produce a P60 form at year-end for each employee
  • Demonstrate an awareness of all other relevant payroll forms

Duration

Approximately 70 to 80 hours of active study time with our time-saving utilities.

Includes

• Two Printed Workbooks containing lessons, examples and tasks and One Activity Answer Book
• Online assessments marked by your dedicated tutor
• Up to 6 months Award Winning Qualified 1-to-1 tutor support by e-mail and telephone