Pay batches group together the earnings of payees, who belong to a pay group, and allow the earnings to be processed and paid.
A separate pay batch must be processed to pay each pay group to which payees belong for each pay period. Multiple pay batches can be processed for any given pay group for any given pay period. This may be necessary where there are late timesheets or timesheets have been adjusted after being processed in a prior pay batch.
Creating and processing a pay batch is a multi-stage process as summarised in the diagram below. However, stages can be switched off if not used such as Gross Deduction Stage if processing only CIS tax types.
To create a pay batch you must do the following:
select the pay group to be paid
select the type of batch to be created
specify the payment date.
The pay group determines which group of payees are to be paid as a result of processing the pay batch.
The batch type determines if the pay batch will be created to process payees’ pay for the current period or to process adjustments to payees’ pay for prior, closed periods. For more information, see Normal Pay Batches and Adjustment Pay Batches below.
The payment date specifies the date that payees are expected to receive the earnings paid within the pay batch and this date appears as the payment date on payee's payslips.
Leave accruals, deductions, allowances and employee benefits are applied based on the period worked (pay period end date of the pay batch) and not the payment date.
By default, payees who belong to the selected pay group will be included in a pay batch regardless of whether they have any timesheets for the pay period of the pay batch. This allows you to, for example, pay those payees by adding manual pay items in the batch for those payees, adjust the balance of their leave accruals, pay out their leave entitlements or terminate their employment. However, you can set an option when creating a new pay batch to specify that the pay batch is to include only those payees who have timesheets for the corresponding pay period. This will exclude payees from the pay batch if they do not have at least one timesheet that belongs to the pay period of the pay batch.
Normal Pay Batches
A normal pay batch allows payees’ pay to be processed based on timesheets, manual pay items and leave items that belong to the current (open) pay period. For example, a timesheet is included in a normal pay batch if the end date of the timesheet falls within the date range of the open pay period for the pay group. Similarly, a manual pay item or leave item will be included in a normal pay batch if the item date falls within the date range of the open pay period for the pay group.
Earnings paid to a payee as a result of processing a normal pay batch contribute to the payee’s total earnings for the current pay period.
Adjustment Pay Batches
An adjustment pay batch allows payees’ pay for a prior pay period to be adjusted in the event that their timesheets for the pay period have been adjusted since that pay period was closed and uses the data stored against the validity periods active as at the time of the adjustment batch. The closed pay period to which adjusted timesheets belong is known as the adjustment period. An adjustment pay batch will also include any late timesheets that belong to the adjustment period (i.e. where the timesheet end date falls within the date range of the closed pay period).
The operation of the HMRC Details validity period operates as follows:
Where a payee has the tax type CIS, if an adjustment batch is processed for a prior period, the tax treatment relevant for the current pay period rather than the adjustment period will be used.
Where a payee has the tax type PAYE, if an adjustment batch is processed for a prior period:
The tax code for the current pay period will be used and not the tax code of the adjustment period
For the operation of the NI Category, if the adjustment period was for a missing timesheet, it will use the NI Category as at the time it was due.
For the operation of the NI Category, if the adjustment period was for an adjustment to an already paid pay period, it will use the NI Category of the current period and add the earnings to what has already been processed in the current period.
For the operation of Student/Postgraduate Loan, if the adjustment period was for a missing timesheet, it will use the Student/Postgraduate Loan as at the time it was due.
For the operation of the Student/Postgraduate Loan, if the adjustment period was for an adjustment to an already paid pay period, it will use the Student/Postgraduate Loan of the current period and add the earnings to what has already been processed in the current period.
Balancing Payments
Adjustment pay batches can also be used to process balancing payments. Balancing payments are processed to balance out payroll-related data in the system without effecting the payment of payees.
For example, if a payee has been overpaid their pay in the next pay batch can be negatively adjusted to account for the overpayment. However, if the payee repays the overpaid amount prior to receiving their next pay, the system needs to balance out the overpayment without adjusting the payee’s next pay. In such circumstances, a balancing payment can be processed to adjust the payee’s pay data and related accruals and deductions, without actually paying the payee.
To process balancing payments, the following needs to be done:
the relevant timesheets must be adjusted to correct any overpayment or underpayment
an adjustment pay batch must be created with the Balancing Payments option enabled
the relevant payees/timesheets must be included in the adjustment pay batch and the pay batch must be processed.
The following applies to any payee who is included in a balancing payments adjustment batch:
for reporting purposes, the payee’s payment method for the pay batch is recorded as Balancing Payment
if the payee’s default payment method is EFT, the payee’s pay data for the pay batch will not be written to an EFT file.