Pay an employee a specific amount of nett pay
Description

When an agreement is made between the employer and the employee, that regardless of personal tax credits or hours worked, the employee will receive a guaranteed amount of nett pay each period; This is called a Nett to Gross payment.

Use this option to enter the nett amount you want to pay the employee. The associated tax, social insurance (PRSI), universal social charge (USC) calculates automatically, and determines the corresponding gross amount of pay.

  • A nett to gross payment can't be used in conjunction with a benefit-in-kind (BIK) payment, Illness Benefit payment, Maternity Benefit payment or Paternity Benefit payment
  • You should use a nett to gross payment type with caution, as any historical errors can be difficult to correct. Sage technical support aren't qualified to support you with any manual tax calculation corrections, where a nett to gross payment has been used
Cause
Resolution

Set up a nett to gross payment

  1. On the menu bar, click Company/Payroll then click Payments.
  2. Click New, then set up the payment as follows:

    Title Enter the name of the payment, for example, Nett2Gross.
    Type From the drop down list, choose Variable amount each pay period.
    Tax If the payment is subject to tax, select this check box.
    Universal Social Charge If the payment is subject to universal social charge (USC), select this check box.
    Include in pension calculation If the payment is included in the pension calculation, select this check box.
    PRSI Depending on whether the payment is subject to PRSI or not, choose one of the following options:
    • Apply Employee & Employer PRSI
    • Apply Employer PRSI Only
    • Apply Employee PRSI Only
    • Do not apply PRSI
  3. Click Save, then click Close.
  4. On the menu bar, click Company/Payroll then click Company Details.
  5. Click the Misc. tab.
  6. In the Nett to Gross Type list, click one of the following options:
    • Total – If you want to pay the employee a specific nett amount and they aren't receiving any other payments, select this option
    • Extra – If you want to pay the employee an extra nett amount, in addition to any other payments they receive in the period, select this option
  7. In the Nett to Gross Elm list, click the payment you set up in steps 1 to 3.
  8. To save the details you've just entered, click OK.

Specify the employee's nett pay amount

There are two different ways you can specify an employee's nett pay amount. The one you use depends on whether the nett pay amount stays the same each period or not.

Nett amount stays the same each pay period

  1. On the menu bar, click Processing then click Employee Details.
  2. Next to the Surname box, click browse and click the relevant employee.
  3. Click the Pay / YTD tab.
  4. Under Pay/Misc, in the Nett to Gross box, enter the nett amount you want to pay the employee each period.



  5. Click Save.
  6. Repeat steps 2 to 5 for each employee you want to specify nett pay amounts for, then click Cancel.

Nett amount fluctuates from period to period

  1. On the menu bar, click Processing then click Time and Pay.
  2. Under Entry mode, select Random then click Continue.
  3. Next to the Employee box, click browse and click the relevant employee.
  4. Under Nett To Gross, in the Pay box, enter the nett amount you want to pay the employee this period. 



  5. Enter any additional pay details you want to record, then click Save.
  6. Repeat steps 3 to 5 for each employee you want to specify nett pay amounts for this way, then Cancel.

Paying an employee nett to gross, but their timesheet shows a higher nett pay than agreed

If the employee's timesheet displays a higher nett pay than agreed, this is typically due to a tax refund, after importing new RPN information for the relevant employee.

NOTE: If the employee's only receiving one Nett to gross payment, the Nett to Gross Type must be set to Total iCompany/Payroll, click Company Details, then click th Misc tab. 

Before importing your RPNS

After importing your RPNs

Depending on what's specified in the employee’s contract and/or company policy with regard to who's entitled to tax refunds, complete one of the following options:

  • If the employer is to receive the tax refund - You must set up a nett deduction and use it to deduct the refund of taxes on the employee's timesheet
    NOTE: As the employer, you receive the tax refund automatically by a reduction in the tax liability owed to Revenue, via your monthly statement issued by the Revenue. 
  • If the employee is to get the tax refund – Save the employee's timesheet as normal and pay them the increased amount of nett pay
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