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The Future of Payroll

The Future of Payroll. P Simon Parsons MSc FIPPDip MBCS. Agenda. Ceridian Payroll News Ready to Run Part Trials Reporting Modernisation On the Legislation TYE 2010/2011 Tax NICs 2011 ASPP 2011. Agenda. On the Legislation (contd) Pensions and NICs 2012 Personal accounts

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The Future of Payroll

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  1. The Future of Payroll P Simon Parsons MSc FIPPDip MBCS

  2. Agenda Ceridian Payroll News Ready to Run Part Trials Reporting Modernisation On the Legislation TYE 2010/2011 Tax NICs 2011 ASPP 2011

  3. Agenda On the Legislation (contd) Pensions and NICs 2012 Personal accounts HMRC PAYE review Real-Time Information Centralised Deductions Ceridian View

  4. Ceridian Payroll into the future Innovations are being developed and released in phases as we move to a new, modern technology, transactional based process. Live now: Run Payroll – Ready to Run Run Payroll – Part Trials Into the future: Data Transactional – Project Payroll Active

  5. Run Payroll – Ready to Run Ability to request the final live payroll process on demand Used by over 300 payroll users each month and growing Available on User Interfaces: HRevolution 5 Payroll, Ceridian Payroll Solution 1 & Ceridian Payroll Solution 2 (Source Payroll) Confirms data upload completions and authorises live run process on demand Advantages Not tied to strict calendar Offers speed of process

  6. Run Payroll – Ready to Run

  7. Run Payroll – Ready to Run Disadvantages: If you were ready to go, then none Rerun Warning: Do not use if you are re-running payroll or undertaken special bonus process (bonus run) http://www.ceridian.co.uk/hr/nav/1,4102,1380,00.html

  8. Run Payroll – Part Trial Part Trials allows users to undertake a trial payroll process for a sub-selection of employees or only in relation to data submitted without the need to process all employees through a full trial (and therefore not using a full-trial processing credit). This expanded facility is part of our ongoing enhancement process designed to provide you with the most modern, efficient payroll technology in the industry. They do not count towards any trial run limit (2) http://www.ceridian.co.uk/hr/nav/1,4102,1380,00.html

  9. Run Payroll – Part Trial - Setup

  10. Run Payroll – Part Trial

  11. Run Payroll – Part Trial Offers great flexibility with fast turnaround payroll results. Does not run your whole payroll, only for selected employee’s PayBase and results show all processed so far (accumulates)

  12. Into the future – Transactional payroll Project Payroll Active: Transactional based payroll process Pre-processed result on entering new period Data processed on receipt Latest pay results available Make as many changes as you like (open records) When finished then commit the result (either by calendar or by selection) After commit there is no more process apart from changing the status of the records, producing the Direct Credit files and generating any Payslip and other output print requirements

  13. Into the future – Reporting modernisation What is going: Microfiche (replaced by Ceridian Online Reporting) Legacy payroll reports rationalisation (duplicated by PayBase and online reporting): Statutory Payment reports Input related reports Holiday / Sick report Worked Hours report etc

  14. Tax Year End 2010/2011 Very little has changed Employer may now offer as an option eP60 for the 2010/2011 tax year eP60 format has to be approved by the HMRC forms unit – Ceridian format will be approved Employee has to agree to receive eP60, else the employer is obliged to distribute a paper P60 “Duplicate” annotation dropped from 2nd copy P60s Statutory concession has now ended – deadline is truly 19th May (not 26th) for P14/P35

  15. Tax - Tax Additional rate D1 code (50%) – prepare them for the big bill in 2012 Additional rate tax payers are not having all of their liability collected via PAYE: Secondary employments are not collecting enough Some are still receiving personal allowances that will be removed 2011 will see the Single Persons allowance increase

  16. Tax – Child Care Vouchers - proposal Applicable to new joiners (of the scheme) from April 2011 only Employers make an annual assessment of earnings If Additional Rate Earnings (£150,000+) then only £22 per week is tax free If Higher Rate Earnings, then only £28 per week Others remain entitled to £55 per week How? Detail is awaited And NICs?

  17. Tax - Pension Restriction Again from April 2011 Prior proposal (Labour government) restriction of pension tax relief to Basic Rate (20%) New proposal (Coalition government) new pension relief limit of between £30,000-£45,000 (tbc) Possible higher rate relief limit (40%) Payroll impact: None directly Continue to operate “Net Pay Arrangement” Recovery is a Self Assessment activity Pension schemes may review contribution rules!

  18. National Insurance Contributions (NIC) 2011 Awaiting the Spending review announcements Earnings Threshold or ET separate for NICs calculation purposes: Primary Threshold or PT (relating to employee contributions) Secondary Threshold or ST (relating to employer contributions) Only PT used for recording purposes (replacing ET) It is possible that the PT can be higher than the ST Contribution rates all increase by 1% point (12%/13.8%/2%) Total rewrite of NIC calculations Some employees will drop out of contributions, others will pay more – Salary Sacrifice / Flex may need reviewing

  19. Additional Statutory Paternity Pay Babies due or adoptions from 3rd April 2011 Father / Partner may take remainder of mothers maternity leave (any of the last 26 weeks) and be entitled to remaining paid leave (if any) as ASPP – mother returns to work In the event of the death of the mother, the father / partner becomes entitled to all remaining leave (paid and unpaid) So normal start Oct 2011, early birth may start before. In exceptional circumstances (death of mother) may start as early as Nov 2010.

  20. Pensions & NICs 2011 Contracted Out Money Purchase Schemes (COMP) end. No more F, G or S NIC letters If the pension scheme continues - they continue as not contracted-out All revert to A, B or J

  21. Personal Accounts - Calculation end game Employer provided scheme which meets a minimum criteria: From a start point (£5,035 based on 2006/2007) To an end point 8% overall contribution 3% minimum from employer Standard Ceridian pension calculation already capable

  22. Personal Accounts - Staging Employers staged into their duties from Oct 2012 through to Sep 2016 DWP will write 12 months prior 1 month joining window Employer can elect to join earlier – but then fall under the obligations if they do so

  23. Personal Accounts - Phasing During Staging Period (Oct 2012 to Sep 2016) 2% with minimum 1% from employer 1 year following staging period (Oct 2016 – Sep 2017): 5% with 2% minimum from employer From Oct 2017: 8% with minimum 3% from employer No gradual phasing for Defined Benefit or Hybrid schemes although auto-enrolment can be delayed until Oct 2016

  24. Ceridian's Personal Account (PA) Readiness Ceridian’s standard Pension calculation capabilities already contain all the current publicised elements required to calculate and deduct in accordance with personal account minimum requirements. Ceridian will continue to monitor the developing PA requirements to continually ensure calculation readiness. Specific bespoke requirements can be considered as to whether they are covered by existing parameter capability or whether bespoke development enhancement needs are required. Bespoke development would be a chargeable activity as these would extend beyond the legislative boundaries (which are already fully covered). Auto-enrolment is an employer obligation - as with tax and NICs, PA information must be provided to payroll

  25. Personal Account - Employer required actions Understand legal obligations and start point Plan any timing and phases Either create an exempt Pension Scheme or use NEST Create appropriate contractual terms and conditions in relation to additional PA activity Engage and communicate with employees Undertake initial opt-in and opt-out activity (start of scheme) Create and operate a process to deal with ongoing standard opt-in and opt-out (including refunds) activity Ensure timely payment of contributions

  26. PAYE Review – The discussion Published: 27th July 2010 Closing date: 23rd September 2010 Improving the operation of PAYE The proposal: Using BACS facilities for interchange of data Provide Real-time information (RTI) (2012?) Provide Centralised Deductions (2015?)

  27. PAYE Review RTI – Ceridian opinion Correction of current interchanges seen as most critical Single stream of using BACS not feasible, should be extended to Internet and EDI Real Time Information unrealistic although would support the concept of Regular Information that is relevant - Use of P11 for data requirement should be dropped, need an electronic exchange basis not based on old paper forms

  28. PAYE Review CD – Ceridian opinion Centralised Deductions: We do not support this proposal Major loss of UK business cash flow advantage (earnings paid gross on pay day) Employee confusion on what has been paid and what is in the bank Would HMRC or their agent get it right? Who deals with the fall-out? The proposal is overly simplistic (directors, aggregation, calculation methods, net payment schemes, salary sacrifice / flex)

  29. Ceridian Payroll – LIVE NOW Live now: Run Payroll – Ready to Run Run Payroll – Part Trials http://www.ceridian.co.uk/hr/nav/1,4102,1380,00.html Payroll Strategy Team simon.parsons@ceridian.com (legislation & all things payroll) ian.brennan@ceridian.com (legislation & user interfaces) trevor.woodward@ceridian.com (portal & reporting) steven.mckenna@ceridian.com (Pay & People, Pay2Day)

  30. Questions?

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