Posts Tagged ‘Sage Quickpay’

Do I need a week 53 Pay Period? Sage Quickpay and Micropay

Friday, November 19th, 2010

Q. What is an extra pay period (week 53) ?

Week 53 occurs in a weekly payroll when there are 53 pay days in the tax year. There are normally 52 pay periods in a weekly payroll, but in some years the dates fall in a way that gives rise to an ‘extra’ pay period’.

An extra pay period can also occur in fortnightly and four-weekly pay frequencies:

Fortnightly payrolls normally have 26 pay periods, but can occasionally have 27.

Four-weekly payrolls normally have 13 pay periods, but can occasionally have 14.

Employees are entitled to tax credits for the extra pay period, but only on a Week 1 basis.

This means that the employee receives more than the year’s total tax credits. The Inspector of Taxes will take this into consideration when issuing the next year’s tax credits.

An employee receives an insurance week for the extra pay period only if they have not already received the maximum 52 insurance weeks. You need to enter this insurance week in the Timesheet Entry screen if necessary.

 

Q. Do I have an extra pay period?

After you have fully completed Week 52 (or Fortnight 26, or Four-Weekly Period 13), check the date on which the next payday occurs.

If the next payday falls on the 31st December, you have an extra pay period.

If the next payday occurs on or after the 1st January, you DO NOT have an extra pay period. This pay period must be processed as Period 1 of the new tax year.

Incorrect processing of an extra pay period may result in inaccurate returns for that tax year.

Only the date of payment (not the date of work) determines whether a pay period is ’extra’ in the current year. So if you have a pay date of 03/01/2011, this must be processed as Period 1 of 2011, regardless of when the actual work for this period was done.

 

Q. Should I run a week 53 over the christmas period?

Generally, the answer to this question is ’No’. You only run a Week 53 when there is an extra pay period to be processed in the tax year, regardless of any other circumstances.

 

Q. My employees are on holiday over the Christmas period. Should I run a Week 53 to ensure they get their holiday pay before their holiday begins?

If the pay date for the holiday week falls in January rather than December, the holiday week is not an extra pay period, and must be processed as a normal week in period 1 of the new tax year.

If Week 1 of the new year is a holiday week, and you still want to pay your employees for this week in advance of their holidays, carry out the following steps:

· complete the current tax year

· run the Payroll Year End in full

· set Period 1 of the new year

This can be done at any time after you have installed the Payroll Year End Update.

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April 2009 Budget Changes - Impact for Payroll Calculations - Sage Payroll

Friday, April 10th, 2009

Details of Income Levy, Health Levy & PRSI Changes in Supplementary Budget 2009

Tax Rate Changes
In the short term the income tax rates remain unchanged, the standard rate being 20% and the higher rate is 41%.

Income Levy Doubled
In the Budget last December the Minister announced a new income levy which has applied since 1 January. However, the rates at which the income levy will apply going forward have been doubled and the relevant thresholds have been reduced. The exemption threshold for the income levy has also been reduced from €18,304 to €15,028. The revised rates and associated thresholds are shown below and the new rates will apply from 1 May 2009. If you exceed the income levy entry threshold of €289 weekly, the levy is applied to all of your earnings not just the amount in excess of the entry threshold.

• Income up to €75,036 (previously €100,100) the levy applies at 2%, previously at 1%.
• Income over €75,036 and up to €174,980 the levy applies at 4%, previously at 2%.
• Income over €174,980 (previously €250,120) the levy applies at a rate of 6%, previously 3%.

Health Contribution Levy Doubled
The Health Contribution Levy has also been doubled and the new 4% rate will apply on income up to €75,036. The higher rate levy of 5% (previously 2.5%) will apply to income over €75,036. These changes also take effect from 1 May 2009.The health Levy is calculated as part of the PRSI deduction. The health levy entry threshold remains unchanged at €500 weekly and €26,000 annually. If you earn under theses amounts, you are not liable to pay this levy and unlike the income levy, the levy is only applied to amounts in excess of the entry threshold.

Pay Related Social Insurance (PRSI)
There had been speculation for some time that the employee ceiling for full rate PRSI payers would be abolished. However, the last Budget introduced an increase in the annual ceiling from €50,700 to €52,000, with the contribution rate unchanged at 4% for employees (excluding the levies) and 10.75% for employers. However, the
Minister now raises the employee PRSI ceiling up to €75,036. This increased PRSI cost for employees will take effect from 1 May 2009.

Implications for Sage Payoll Customers
Relax!. The required changes will be available as a download in plenty of time for the May payroll processing for both Sage Quickpay and Sage Micropay solutions. In the meantime, keep an eye on the www.genesisbusinesscollege.net/blog site for further updates. For details of how Sage Payroll solutions can help eliminate your payroll headaches, checkout www.genesisbusinesscollege.net. There is no time like the present!  

 

 

 

 DETAILS OF MAIN CHANGES

 

 

(Including Income Levy, Health levy & PRSI changes)

 

Existing (Yearly)

Proposed

(Yearly)

Existing Weekly

Proposed (Weekly)

Income Levy

€

€

 

€

Exemption Threshold (under 65)

€18,304

€15,028

€352

€289

Middle Rate Threshold

€100,100

€75,036

€1,925

€1,443

Higher Rate Threshold

€250,120

€174,980

€4,810

€3,365

Lower Rate

1%

2%

 

 

Middle Rate

2%

4%

 

 

Higher Rate

3%

6%

 

 

 

Existing

Proposed

 

 

Health levy

%

%

 

 

Lower Rate 

2.0%

4.0%

 

 

Higher Rate

2.5%

5.0%

 

 

Lower Rate Entry Threshold

€26,000

€26,000

€500

€500

Higher Rate Threshold

€100,100

€75,036

 

 

 

Existing

Proposed

 

 

PRSI

€

€

 

 

PRSI Ceiling

€52,000

€75,036

 

 

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Sage Payroll Software - Budget 2009 Income Levy

Wednesday, February 4th, 2009

What is the Income Levy?

The Income Levy introduced in Budget 2009 applies a supplementary tax amount to your gross income. The Levy amount is calculated BEFORE any relief amounts for capital allowances, losses or pension contributions.

Below, some basic questions about the Income Levy are answered.

For comprehensive information, refer to this official Revenue Commissioners document:

Income Levy: Notes for Guidance and Implementation Arrangements for Employers

 

When does the Levy apply?

The Levy applies from January 1, 2009.

 

Who must pay the Levy?

If you are under 65, and your gross income exceeds €18,304 per annum, you must pay the Levy on the full amount of your gross income.

If you are over 65, and your gross income exceeds €20,000, you must pay the levy on the full amount of your gross income. Alternatively, if you are assessed as a married couple over 65, and your combined gross income exceeds €40,000, you must pay the Levy on the full amount of your gross income.

If your gross income is less than the above amounts, you are exempt from the Levy.

You are also exempt from the Levy if you hold a medical card.

 

Is any income exempt from the Levy?

Important examples of the types of income exempt from the Levy include the following:

·         If your annual gross income is less than €18,304, you don’t have to pay the Levy.

·         Social Welfare payments, including those received from abroad, are exempt.

·         Income in lieu of Social Welfare payments, such as Community Employment Scheme payments or the Back to Education Allowance, are exempt.

·         Income subject to Deposit Interest Retention Tax (DIRT) is exempt.

 

What are the Levy rates?

Income Thresholds

Income Levy Rate

Income up to, but not exceeding, €18,304 per annum

Exempt from the Income Levy.

Gross Income between €18,304 and €100,100 per annum

If your annual gross income exceeds €18,304, a rate of 1% is applied to the portion of your annual gross income up to €100,100, INCLUDING the first €18,304.

Gross Income between €100,101 and €250,120 per annum

If your annual gross income exceeds €100,000, a rate of 2% is applied to the portion between €100,101 and €250,120.

Gross Income exceeding €250,120

If your annual gross income exceeds €250,120, a rate of 3% is applied to the portion greater than €250,120.

 

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