Pay Elements, Tax and NI

Compensation and Benefit Types

XCD Payroll supports a very broad range of Compensation and Benefit Types - these are completely configurable to match the Types used by your Company and Payroll provider. You should work with you XCD Consultant to make sure that each pay element or Type - Salary, Bonuses, Commissions, Overtime, Pensions and other third party Benefits, Allowances, regular Benefits and Deductions, and One-off Payments and Deductions - is enabled in the system.

Taxable & NI-able Treatment

The Financial control function is used to set the default tax and NI treatment for payments and deductions. These default values can be written individually if needed.

Every Compensation record has fields that determine its taxable, NIable, attachable and pension etc treatment, as well as the cost centre against which payments are to be allocated. These are automatically given a default value by the system according to rules as configured during initial implementation.

Update treatment for a salary or pension

• • Click on the relevant Compensation record

  • Click on the edit icon next to treatment to be amended

• • Payroll admin - salary section controls the treatment of any salary payments arising from this compensation - there are fields to determine whether salary payments should be Taxable, NI-able, Attachable or included in Holiday pay.

  • Payroll admin - pension section is divided into two parts, the left side of the screen deals with the Employer’s contribution and determines whether the contribution should affect Taxable or NI-able pay. Generally these should remain unchecked. The right hand side section deals with the employee pension contribution. If these are checked pension will be calculated as a before tax (and/or NI) deduction i.e. reduce taxable (and/or NI-able) pay. For a Net pay arrangement scheme we would expect Employee contribution taxable to be checked. For a Relief at source scheme Employee contribution taxable would be unchecked.

To change the rules that are used to set default values, contact XCD support who can make this change for you.

Taxable & NI-able Treatment of Other Payments and Deductions

Every pay record has fields to determine the tax and NI treatment as well as whether the pay element is attachable for court orders and/or council tax purposes, pensionable or to be included in variable payment calculations i.e. where another pay element is to be based on the value of this element. The record also holds the Cost code against which the payment is to be allocated. These are automatically set by the system according to Financial Control rules configured during initial implementation.

To update how the pay element is to be treated:

Go to the relevant record

Click “Edit"

Relevant fields are found in the Payroll admin section

• • Update as required

  • Click “Save”

To change the rules that are used to set default values, you should contact XCD support who can make this change for you.