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Benefit in kind payments

Created on  | Last modified on 

Summary

How to set up a Benefit in Kind (BIK) payment in Sage Payroll.

Description

Benefit in Kind (BIK) is any employee remuneration. It isn’t part of their normal pay which you process through the payroll.

You include BIK on an employee’s payslip to calculate:

  • Tax
  • Pay-Related Social Insurance (PRSI)
  • Universal Social Charge (USC)

You do this without actually paying the BIK amount to the employee, known as notional pay.

NOTE:

The system calculates Tax, USC and PRSI on the total of the actual pay and notional pay. However, the employee only receives actual pay through the Payroll. It's assumed that the employee received the BIK outside of Payroll. For example, the private use of a company car.

Resolution

 Set up a BIK payment

  1. Select Settings from the menu bar, then select Payments & Deductions.
  2. Select Create New Payment, and enter the following information:
    Payment Category - from the dropdown list, select Benefit in Kind
    Payment Type - select one of the following options:
    • Company Car
    • Medical Insurance
    • Staff Housing
    • Other BIK
  3. In the Name field, enter a name for the payment, for example, BIK car. This name appears on the employee’s payslip to identify the payment.
  4. In the Description field, enter some explanatory text about the payment.
  5. Select Save.

You can add the BIK payment to your employee when you process the pay run.