Payroll Setup

This section gives an overview of the XCD Payroll system and its key components. It provides an introduction to: Initial Setup; Running Payroll; and the Year End Process.

XCD Payroll is set up as an extension of the XCD HR application. It gathers Salary, Benefit and Absence information from XCD HR; uses this to calculate and process payroll, either gross (before tax) or net of UK tax; it creates and publishes payslips; then it reports payments due to Benefit providers and creates financial reports to upload to your accounting and cost management systems. Core system processes are similar for both gross and UK net payroll - information relevant only for UK net payroll is highlighted in blue.

XCD Net Payroll handles all aspects of UK Payroll Processing including calculation of tax, NI and net pay; RTI returns through the UK Government Gateway; generating Net pay and third party BACS payments. XCD is updated as needed with current UK tax rates and rules. XCD provides links to HMRC and the Pension Regulator so you can find relevant information as necessary.

Overview

Payroll is an integral part of XCD HR; your XCD payroll consultant will work with you to ensure it is set up correctly. Initial setup involves adding and extending records for:

• 1. Employer(s): Payroll is paid by Employers. For UK net payroll each Employer has a unique Payroll Reference Number.

  2. Company: Each Company is linked to an Employer. Payroll for Employees who work for that Company is paid by the Employer.

  3. Pensions, Benefits and Pay Elements. Pension and Benefit Schemes, and Pay Element types, together with their tax, NI and costing treatment, are building blocks for Employee records

  4. Payment Bases: set the rules by which absence payments will be made; and

  5. Payrolls: Payroll(s) are set up, one per tax year, for each Employer: one for each pay frequency (e.g. monthly and weekly) and for specific groups of eligible employees (e.g. standard or secure, permanent or casual). Cutoff dates may be set after which point only the Payroll team may make changes to the Pay Run and all but critical HR changes are held over.

These are described in this section and below.

HR Source Records

XCD is a single HR and Payroll system: Employee's Personal, Compensation and Benefits data are captured in the XCD HR Application and provide the source records for Payroll. Depending on the HR and Payroll approval and confirmation processes, the Payroll team may review these records or checking for completeness and accuracy before the pay run.

Input and Approval Processes

Standard approval processes may involve:

• Commission and Bonuses input by HR once formally approved

• Leave and Sickness absences are approved by Managers - see Quick Approvals

• Overtime claimed through the XCD Overtime system, once approved by Managers, is sent to Payroll for confirmation before payment

• Pensions and Benefits will normally be set up by Administrators as part of the Compensation record following any change in Job role and Compensation

When Payroll is run, all relevant items approved up to the Payroll cutoff dates will be included in the month's Payroll

Cutoff Dates

To make large payrolls manageable, cutoff dates are set on each Pay Run and requests for payment are passed to Payroll only up to the pay period's cutoffs:

• Overtime, Timesheets and Expenses are paid only after Confirmation by Payroll; Confirmation normally is made only for claims submitted before the Overtime and Timesheet, or the Expenses cutoffs

• Changes made by the HR team to other records - Salary, Pension, Pay Elements, Benefits, Leave - are, with one exception, made available for a run only up to the HR cutoff. (The exception is a late processed leaver, where changes must be included to ensure the leaver is not overpaid.)

In both cases the Payroll team may override the cutoff and decide to make a late-submitted request.

For more information see Cutoff Dates.

Checks and Payroll Control Reports

A full set of Payroll Control Reports supports the Payroll team in checking both input data and payroll calculations before the run is paid.

Run Payroll

Payroll is run each month and follows a few, simple steps:

• 1. Check Employee data are up to date - particularly joiners, leavers and changes; or Tax code and NI category changes - see Manage Employees

  2. Set up New Payroll. Check that processes are complete: e.g. for absence management; timesheet approvals; or overtime approvals

  3. Run Draft Payroll. Create a draft. Use this to assess auto enrolment changes. Check the results using standard control reports and draft payslips

  4. Run Final Payroll. When you are satisfied with the figures, generate a Final Payroll. Once this is published, no further changes can be made

  5. Complete Pay Run. Once Payroll has been finalised you can generate a BACS file to make payments; submit an RTI return; generate a BACS file to make payments; export a finance report.

The regular payroll process from start to finish is set out at Run Payroll, HMRC and Payments.

Year End Process

At Year End a number of processes must be followed:

• • XCD will update the system to manage any changes in tax rules or rates

  • You must generate year end returns and update tax codes

  • Finally you must set up new Payroll and Pay Run records for the new tax year - see Year End Process