- our absence management system pro rated holidays without taking into account 8 days of public holidays, so instead of 28 days only 20 days were pro rated. As a result, employees who left meanwhile were mostly overpaid for their accrued holidays, one was underpaid. Company understand that it was a problem on our side and doesn't mind overpayment left with ex-colleagues. Question should we still report overpayment to HMRC or as long as we didn't underpay HMRC wouldn't mind? Or just underpayment?
- How to pro rate salary if full time employee (5 days a week, 8.5 h/d) had increase half way through the pay month? For example, 15K before, starting August 1, 18K. Should we calculate number of working days in Month 4 to August 1 and multiply it by annual hourly rate for 15K, then add working days that come in August 1-August 5 period multiplied by annual hourly rate for 18K.
OR
£1250 (pro rated monthly salary under 15K) plus an increased difference of hourly rate for August 1-August 5 (that is if under 15K hourly rate is, for example, £10 and under 18K £11, so £1*number of working days between August 1-August 5* number of working hours per day)? Or anything else?)
We always newbies to do a little intro about themselves as it helps us get to know you and also to pitch answers. So just a few things such as - is this your own business? Or are you a bookkeeper or accountant, how long in this business (working for a practice / small company accounts office / or for yourself), what level of training and who you are doing/have done your training with. Which professional body are you with (or are you QE)? Where in the country are you based? Background.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
- our absence management system pro rated holidays without taking into account 8 days of public holidays, so instead of 28 days only 20 days were pro rated. As a result, employees who left meanwhile were mostly overpaid for their accrued holidays, one was underpaid. Company understand that it was a problem on our side and doesn't mind overpayment left with ex-colleagues. Question should we still report overpayment to HMRC or as long as we didn't underpay HMRC wouldn't mind? Or just underpayment?
Hi Aliya. Assuming that the right tax was deducted on the overpayment absolutely no need to report to HMRC. What you've already reported will be correct on RTI.
- How to pro rate salary if full time employee (5 days a week, 8.5 h/d) had increase half way through the pay month? For example, 15K before, starting August 1, 18K. Should we calculate number of working days in Month 4 to August 1 and multiply it by annual hourly rate for 15K, then add working days that come in August 1-August 5 period multiplied by annual hourly rate for 18K.
OR
£1250 (pro rated monthly salary under 15K) plus an increased difference of hourly rate for August 1-August 5 (that is if under 15K hourly rate is, for example, £10 and under 18K £11, so £1*number of working days between August 1-August 5* number of working hours per day)? Or anything else?)
Does the payroll run from the 6th to the 5th? If yes I would calculate the working days and do a split, so 18 days at the old rate and 5 days at the new rate. Divide the salary by 260 to get the daily rate.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Thank you for a welcome! I'm a bookkeeper in a small limited company in Watford. Company is two years old only but due to high employee turnover some issues are coming up.
I meant monthly. Most companies run from the 1st to the 31st, although the paydate may be slightly before or slightly after.
However there is nothing wrong if you choose to have the dates as the 6th to the 5th. Do you pay on the 5th or on a different date?
I never commented on the underpayment, sorry. Depending on the software, you may need to remove the leaving date then enter the extra pay on a 0T w1 basis. This is because the employee may have started elsewhere so tax has to be full deduction and NI calculated as if weekly. Once you're in the next period you can add the leaving date back. You may also need to inform HMRC that you have made the payment so check your payroll guide (just checked mine and I don't need to temporarily remove the leaving date or inform HMRC, as Moneysoft flags that info on the RTI)
If you need any further help, please don't hesitate to ask.
Incidentally, my wife is from Watford, and we were down there a couple of weeks ago at a wedding.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
