PAYE income tax and NICs are remittances all employers must deduct and forward to HMRC on time. Calculating these is a fundamental skill for all in payroll. This training provides a solid grounding in these core areas. It will give you the Pay As You Earn (PAYE) and National Insurance Contribution (NIC) skills necessary for the preparation of manual payments, correction of errors and the understanding of systems output. Comprehensive documentation is provided, and practical exercises and discussions will be undertaken.
This course forms part of the three-day Introduction to Payroll course, but can also be attended as a stand-alone course. Learning is offered either online or in-person and includes one full day of face-to-face content or two half days of online content. Materials will be released in advance of the course and will be available to you through the CIPP online learning platform.
Why you should attend
While modern payroll software is sophisticated, and calculations for the statutory deduction of tax and national insurance mostly happen automatically, it is still critical that those who work with payroll systems know how these calculations work.
Manual calculations may be required to:
- Prepare manual payments
- Correct errors
- Calculate the value of overpayments
- Understand systems output
This course will be delivered by an expert CIPP-certified payroll trainer, who will give you ample opportunities to ask questions and to test your knowledge about the subject through interactive exercises.
This course is a great start to your learning in payroll.
What you will learn
Beginning with calculating gross pay and establishing the different categories of deductions, this course moves to cover in-depth the rates, thresholds and methodologies to manually calculate income tax and NICs using both manual and table methods. The course also covers the differences in calculation for employees starting or leaving and heat is required to be shown on a payslip.
At the end of the course you will be able to:
- Calculate gross earnings
- Calculate income tax and NICs liabilities
- Handle payments for starters and leavers correctly
- Sequence the required calculations correctly
- Outline the correct process for systems output
- Calculate net pay
By the end of the course, you will be able to perform a gross to net calculation for income tax and NICs, understand the extra considerations required for calculating these deductions for starters and leavers and identify the information required on a pay statement.
Ascertaining gross pay
- Classifying taxable and NICable pay elements
- Calculating pay apportionments correctly
- Ascertaining what makes a deduction from pay lawful
- Distinguishing deductions which affect taxable & NICable pay
- Overview of tax relief methods for pension contributions
National Insurance Categories
- Listing the NI category letters currently in use
- Identifying the correct NI category letter for employees
- Awareness of proof required to apply certain category letters
Calculating National Insurance Contributions
- Recognising the names and current amounts of NIC thresholds
- Listing the current rates of NICs for each category letter
- Calculating NICs using the Exact Percentage method
- Calculating NICs using the Table method
The new Health and Social Care Levy deduction
- An overview of the changes to national insurance and the introduction of the Health and Social Care Levy
Identifying different tax codes
- Identifying circumstances which warrant "emergency tac codes"
- Categorising different tax codes
- Distinguishing Scottish tax codes
Prior learning required
This course is an introduction to manual tax and national insurance calculations, however, some familiarity with payroll processing is required. So that you can get the full benefit from the subjects in this course, we recommend that you have a basic understanding of the payroll function. For individuals completely new to payroll we recommend that you complete one or all of the following courses before attending:
- Payroll for Non-Payroll Professionals (1 day trainer-led course)
- Calculating Income Tax (1 hour eLearning module)
- Calculate National Insurance (1 hour eLearning module)
Continuing your learning
This course directly follows from this syllabus to cover a broad range of other subjects which all payroll administrators must competently grasp such as Student Loan Deductions, Court Orders, Auto-Enrolment, Real-Time Information, Year-End obligations and an introduction to Director’s NICs.
Introduction to Statutory Payments
Covering in detail the core statutory payments (SSP, SMP, SAP & SPP) as well as Shared Parental Leave & Pay and Statutory Parental Bereavement Leave & Pay, completing this course will further a payroll administrator's essential skill set.