Payroll Question!

Yestin

Hello!

Right my question is:

We pay employees £1000.00 net if they introduce someone to the company, so what would be the gross figure you would put through payroll so they get the £1000.00 net?? They are on tax code 663L

Hope this is all the information needed for the answer.

Thanks!

A-Vic

Hi Yestin

Are you saying this is comission ? do they have a basic salary or are they paid hourly? has this been the code through the year?

wildgoose1uk

Have a look here http://www.thesalarycalculator.co.uk/lifestyle.php

More information is needed about other deductions like pensions. Also need to consider if this is on top of their normal salary or if it is their only income.

deanshepherd

Most payroll software programs have a 'net to gross' calculator so this will be worked out for you. Which do you use?

Yestin

Thanks for all the responses!!

The £1000.00 payment is a payment they get tax free (company pays the PAYE & NIC) because they have found someone to work with us meaning we don’t have to pay a recruitment agency. The person in question has no pension deductions and has been on the same tax code since April 2010..

We do the payroll on sage....god I hope it has the gross to net function but it would still be good to know who to work it out manually..

Thanks guys!

Yestin

Sorry...they get a basic salary not paid by the hour....

A-Vic

I know zero about sage payroll but ours does have gross to net function and on the link there is a three month free trail :-

http://www.thesaurussoftware.co.uk/

NeilH

Hi

Assuming they are standard rate for tax and NIC is at 11%and their tax code is cumulative, the gross amount should be circa £1450.00. However, this doesn't take into account student loans, pension contributions as a percentage of total salary etc. It also assumes that the extra won't take them into the next tax or NIC bracket.

I worked with a software a few years back that would do net to gross, but only if the employee had deductions for just NIC and tax - student loans etc prevented it from working. In these instances it was a case of calculating the payroll without the addition, then take an approximate gross figure, re-calculate and tweak the gross figure it until the net increased by the correct amount.

Let us know how you get on.

Neil

payrollpro

Yestin,

Just a thought, but since this is a relatively one off transaction why doesn't your client deal with all such payments in a PSA. This comes under the heading of "Irregular" as a one off payment that is not minor. They can do it all at year end and make a single payment in October to cover tax and Class 1B. Then you don't have to worry about student loans, attachments and the rest, and in any case such payments are not usually earnings for SLD and Attachment.

Payrollpro

A-Vic

payrollpro wrote: »

Yestin,

Just a thought, but since this is a relatively one off transaction why doesn't your client deal with all such payments in a PSA. This comes under the heading of "Irregular" as a one off payment that is not minor. They can do it all at year end and make a single payment in October to cover tax and Class 1B. Then you don't have to worry about student loans, attachments and the rest, and in any case such payments are not usually earnings for SLD and Attachment.

Payrollpro

I didnt know you could do that have you any more info on that please??