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regular 'wages sub' - RTI needed

Just want to check before I tell the client ...

Client has monthly payroll, but has decided that he wants to give a mid-month 'sub', calculated as wages accrued less 20%. It's not a one-off, this'll happen every month.

Presumably I'm correct in saying that this has turned into a fortnightly payrun and 2 RTIs are needed? 

Thanks

 

 

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03rd Oct 2018 12:59

A fortnightly payroll has ramifications, because there are 52 weeks in a year, not 48, so a fortnightly payroll has 26 payments in a year (and 27 payments about 1 year in 11). Some employees may not like their payments slowly drifting through the month because many bills arrive monthly.

There is no such thing, in PAYE terms, as a "half-monthly" pay interval unfortunately.

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to TomMcClelland
03rd Oct 2018 13:15

TomMcClelland wrote:

There is no such thing, in PAYE terms, as a "half-monthly" pay interval unfortunately.

Mmmm - in theory it can be done.

But where you'd get the software, I don't know. Probably have to have it custom written.

Crazy idea ©

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to lionofludesch
03rd Oct 2018 14:01

lionofludesch wrote:

TomMcClelland wrote:

There is no such thing, in PAYE terms, as a "half-monthly" pay interval unfortunately.

Mmmm - in theory it can be done.

But where you'd get the software, I don't know. Probably have to have it custom written.

Crazy idea ©

The concept doesn't exist in HMRC's specifications for PAYE and NI routines. Nor does it exist in things like auto-enrolment. Pay intervals can be any multiple of a week or month, but cannot be a fraction of a week or month.

Some (very expensive) payroll software allows multiple payments within a single PAYE period. It achieves this by adding second and subsequent runs to the original run, calculating deductions for the whole period, then subtracting the deductions from the previous pay run(s).

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03rd Oct 2018 13:33

So are we saying that I can treat the mid-month payments as subs, every month, and only submit 1 RTI per month?

Doesn't that fly in the face of having to submit prior to payment and wouldn't a sub at the same time every month calculated like this constitute a payment?

NB Not trying to be argumentative ...

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to atleastisoundknowledgable...
03rd Oct 2018 14:01

atleastisoundknowledgable... wrote:

So are we saying that I can treat the mid-month payments as subs, every month, and only submit 1 RTI per month?

No - I'm saying you can only do it if you can find some RTI software that can cope with twice a month pay periods.

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to lionofludesch
03rd Oct 2018 14:07

lionofludesch wrote:

atleastisoundknowledgable... wrote:

So are we saying that I can treat the mid-month payments as subs, every month, and only submit 1 RTI per month?

No - I'm saying you can only do it if you can find some RTI software that can cope with twice a month pay periods.

Payrite can do something similar, which is to do the first run as a main payroll run, file RTI, then recalculate a "supplementary run" in the same month, and refile RTI with the new totals and a second net pay figure. It is incredibly functional payroll software for people with complex requirements such as this... Be sure to be sitting down when querying price.

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to TomMcClelland
03rd Oct 2018 14:16

Who'd've thought it - just looked and Xero have a bi-weekly payrun. (their instances on Xero seems to have actually worked out ... for something).

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to atleastisoundknowledgable...
03rd Oct 2018 14:31

atleastisoundknowledgable... wrote:

Who'd've thought it - just looked and Xero have a bi-weekly payrun. (their instances on Xero seems to have actually worked out ... for something).

Are you sure that "bi-weekly" in this instance isn't just another way of describing "fortnightly"? I've seen that done before, and it doesn't really solve the OP's problem.

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to TomMcClelland
03rd Oct 2018 14:46

Bi-weekly / twice monthly, granted not the same but I can sell it to the client as the available option. (I'm the OP).

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to atleastisoundknowledgable...
03rd Oct 2018 15:46

atleastisoundknowledgable... wrote:

Bi-weekly / twice monthly, granted not the same but I can sell it to the client as the available option. (I'm the OP).

It'll work well for February.

So long as it's not a leap year.

But .... I can see we can't dissuade you.

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to atleastisoundknowledgable...
03rd Oct 2018 14:03

atleastisoundknowledgable... wrote:

So are we saying that I can treat the mid-month payments as subs, every month, and only submit 1 RTI per month?

(snip)

I didn't see anyone say you could treat mid-month payments as subs and only file RTI once per month. I've seen it argued that if the mid-month payment constitutes a formal loan from the employer to the employee it would escape RTI reporting requirements. I can't comment on the legitimacy of that argument...

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