Preparing a Pay Run

The first step in running payroll is to click Prepare - this initiates a set of actions to check the previous run is complete and prepare the run for processing.

What does the 'Prepare' function do?

The Prepare function is processed from the Payroll path, which is available from the Pay Run.

The 'Prepare' function is a mandatory stage that must be processed before a retro or draft pay run is processed. It is used to set up data and tasks for the new pay period. The 'Prepare function must be run for an additional as well as main pay run. A summary of actions undertaken:

• Checks that the previous period Pay Run has been complete. The check is against the previous period FPS having been ACCEPTED by HMRC.

• Checks for any employees with incomplete set up e.g. Payroll Joiner details not completed. Tasks will be automatically created.

• Deletes any Pay Detail, Pay Summary, Financial Reporting and Pension Reporting records that have already been created for the current (or future) period. This will be the case if a Pay Run has already been processed in the current period, but the user wished to 'reset' the period by returning to the Prepare stage.

• Deletes any Financial Reporting and Pension Reporting records previously created in the current (or future) draft pay Runs. Again this is to reset data back to start of period status.

• Updates the tax code of any employee who is in receipt of a payment after leaving i.e. their leave date has previously been submitted to HMRC to 0T Week1/Month1 (S0T W1/M1 for Scottish and C0T W1/M1 for Welsh resident taxpayers)

• Updates Leave Requests with no end date with the Payroll End Date

• Identify employees eligible for processing and updates all relevant counts.

Note - as the Prepare function updates Leave Requests with the Period End date which in turn calculates occupational payments, it is important that all sickness and parenting leave requests are entered before the Prepare function is processed. If a Leave Request is entered after Prepare then it becomes a manual task to populate the Payroll end date against the individual Leave Request.

In a new pay period the Payroll path opens as follows i.e. 'Prepare' is the only available function:

Click on the Eligible EEs 'View' link to open a report showing all employees that are to be considered for this Pay Run - this will open up in a new tab:

Note - the other counts (above the Payroll path) will remain 0 until the Prepare function is processed.

Processing the Prepare Function

Click Prepare on the Payroll path.

The first check is to ensure that the previous period has been completed. For a UK Net Payroll, the check is that the FPS for the previous pay period has been submitted and accepted by HMRC. For a Gross Payroll (where UK tax and NI are not processed) the first check is that the previous period Pay Run has been completed.

For UK Gross Payroll, if the FPS does not have a status of 'Accepted' the following error will be output when the Prepare stage is clicked:

If the previous period FPS has been submitted and accepted by HMRC the following message will be output:

Click Proceed

The Payroll Path is hidden during processing of the Prepare function. This prevents any other user from processing the same payroll simultaneously.

A progress bar shows the progress of the Prepare function.

The stages are:

• Preparing new pay run

• Identifying eligible employees

• Checking employee records

When each stage is successfully completed the circle on the progress bar is ticked. If a section fails to complete there will instead be a cross inside the circle.

Once the Prepare stage is completed the Payroll Path is updated as follows:

The 'Prepare' stage changes to green indicating that this stage has been processed.

'Retro' and 'Draft' stages are shown in blue and therefore are both available for processing. 'Retro' is the next in the sequence so is expected to be processed next, but the user may decide to defer retro processing and move directly to the 'Draft' stage.

Note: if there are no retro records to process the 'Retro' stage will be grey (unavailable) i.e. only 'Draft' will be coloured blue.

If the user hovers over a step that has been actioned i.e. green and the colour changes to dark green then that indicates that step can be reprocessed. In this case the 'Prepare' step will turn a dark green therefore is available for reprocessing.

The 'Prepare' function also updates the counts (above the Payroll path).

In the example above the counts show that there are 13 employees who are eligible for processing in the current pay period, 3 employees with pending retro events i.e. the effective date of change is before the start of the current pay period and 6 employees with current pending events i.e. changes made since the last Pay Run where the change is effective in the current pay period. The 'Pay' count is 0 because there has not been a retro or draft processed in the current pay period.

Payroll Setup Incomplete

If there are any payroll set up issues discovered during processing of the Prepare function a Task will be created. These are shown on the Pay Run screen in the 'Task Upcoming & Overdue' section. They can also be viewed on the 'Home' tab of the Payroll app.

The example below shows that Payroll Setup is incomplete.

Note - the same task can also be viewed on the Home page of the Payroll app under ‘Today’s Tasks’.

Click on the Complete payroll Setup due today link to view the relevant task. The 'Comments' field will contain information pointing the user to what requires completing to allow payroll to be processed.

In this case the user is pointed to the 'Starter Declaration Check' report which will highlight employees with missing payroll data. Click on the Related To pay period link and view the 'Starter Declaration Check' report from the Reports sub-tab:

The above report shows that Thyra Delta (row 3) has a missing tax code. This is most likely because the Payroll Starter function was not processed for this employee.

Click on the Mark Complete button once this task has been completed which will clear the task out of the 'Upcoming & Overdue' list and move into a completed list:

Complete the fields to set up your new record:

• Employee: key in the name of your employee then select the record

• Employee name: not mandatory but if you type in the name here you will be able to search for them in the Eligible list views

• Pay run: select the Pay Run - if you have several April-2021 runs be sure to choose the right one (tip: clone the record for an employee in the same run)

• In Out Status: check Current pending - and if need be Retro pending - to be sure your Employee will be included in the run.

Save and your Employee is now eligible for the run and will be included in the next draft.

Pay Run Tabs

Sub-tabs are created dynamically at appropriate points in the Payroll process. At the Prepare stage 'Pay Run', 'Reports', 'Notes' and 'Errors' are shown.

Pay Run sub-tab: shows all relevant information pertaining to this Pay Run. The key dates are populated based on rules defined against the Payroll and these can be overwritten at Pay Run level.

Errors sub-tab: there will be no errors prior to the Prepare stage. If a Draft pay Run errors it will land on the Errors sub-tab, highlighting any issues which may have arisen.