Process redundancy pay if your employee qualifies for it.
Not all employees qualify for a statutory redundancy payment, even where a redundancy situation exists. If you're unsure, contact Revenue. They can also clarify whether the redundancy amount is exempt from tax, universal social charge (USC) or social insurance (PRSI). If you're unsure of what PRSI code to use when recording redundancy payments, contact the Department of Social Protection.
Cause
Resolution
Set up a redundancy payment
On the menu bar, click Company/Payroll then click Payments.
Click New, then set up the redundancy payment as follows:
Title
Enter the name of the payment, for example, Redundancy.
Type
Click Redundancy.
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
Select this check box to include this payment in the calculation.
PRSI
Depending on whether or not the payment is subject to PRSI, click one of the following options:
Apply Employee & Employer PRSI
Apply Employer PRSI Only
Apply Employee PRSI Only
Don't apply PRSI
Apply Pension Related Deduction
If the payment is subject to pension related deduction (PRD), select this check box.
This option is only available when you within your software.
Factor
Enter 1.0000.
Multiply by the number of holiday periods
Don't select this check box.
This option is only available in weekly and fortnightly payrolls.
Formula
Ignore this option.
3. Click Save then click Close.
If part of the redundancy payment is subject to tax, USC or PRSI and the rest is exempt. Set up two or more payments to record the amounts separately. If you need to process part of the payment under a different PRSI code, refer to 'To process redundancy payments with different PRSI codes'.
Process redundancy pay on an employee's timesheet
On the menu bar, click Processing then click Time and Pay.
Under Entry mode, select Random, then click Continue.
Next to the Employee box, click browse and click the relevant employee.
Locate the redundancy payment, then enter the amount in the Hrs/Val column.
Enter any other pay details you want to record for the employee for this period. For example, overtime.
To mark the employee as a leaver, under Leaving, in the TP list, click Yes.
In the Date box, edit the employee's finish date if required.
Under Pay periods in the Insur. Weeks box, check the number of weeks is correct. Edit if required.
This will be the number of weeks the employee has worked in the current pay period. If an employee works for any day (Monday to Sunday) in a particular week, they're eligible for an insurance week for that week
In the Weeks Worked box, enter the same value as you entered in step 8.
Click Save then click Cancel.
Process redundancy payments with different PRSI codes
If Revenue or the Department of Social Protection advise that you record part of the redundancy payment under a different PRSI code, you need to:
Process the part of the redundancy payment for one PRSI code in your normal pay run
On the menu bar, click Processing then click Time and Pay.
Under Entry mode, select Random, then click Continue.
Next to the Employee box, click browse and click the relevant employee.
Locate the redundancy payment, then enter the redundancy amount you want to record under this PRSI code in the Hrs/Val column.
Enter any other pay details you want to record for the employee for this period. For example, salary or overtime.
Under Pay periods in the Insur. Weeks box, check the number of weeks is correct. Edit if required.
This will be the number of weeks the employee has worked in the current pay period. If an employee works for any day (Monday to Sunday) in a particular week, they're eligible for an insurance week for that week
In the Weeks Worked box, enter the same value as you entered in step 6.
Click Save then click Cancel.
Complete the rest of your payroll for this pay period as normal. Once you've done this, you can proceed to the next section.
Process the second part of the redundancy payment under the other PRSI code in a bonus run
You only process a bonus run after you complete the normal pay run, never before it.
To set a bonus run, click Processing then click Set Period.
Don't change the period number
Select the Bonus Run check box, then click OK.
To record the redundancy pay, click Processing then click Time and Pay.
Under Entry mode, select Random then click Continue.
Next to the Employee box, click browse and click the relevant employee.
Under PRSI Code, select the relevant PRSI code.
Double-click the next available line in the Pay Element column, then click the redundancy payment.
Enter the redundancy amount you want to record under this PRSI code in the Hrs/Val column.
To mark the employee as a leaver, under Leaving, in the TP list, click Yes.
In the Date box, enter the employee's finish date.
Click Save then click Cancel.
Closing a bonus pay period is no different to closing a normal pay period. Simply follow your normal processing routine.
Before you can generate this employee's P45 information, you must run the End Of Period (EOP) process.