In this document we will look at changing pay frequencies.
We will cover when it is best to change frequencies and also how to achieve this within the Qtac payroll software. It is important to keep in mind that when changing pay frequencies we are always going to be looking at the payslip date. Your pay period end date is not relevant to the change of pay periods.
When relevant tax week is mentioned, this is the next week that falls within the correct frequency. For example a four weekly payroll relevant weeks are only 4, 8, 12, 16 etc. Week 5 is not a relevant week for a 4 weekly payroll.
Monthly to Weekly
Follow this process if you are changing from Monthly to Weekly, 2 Weekly or 4 Weekly.
- Find the next whole and relevant tax week after the last month that you have paid. (Keep in mind that the tax month ends on the 5th of each month.) This week is when your new pay frequency will start.
- Any days/weeks that you have skipped will need to be included in your next pay.
Changing from monthly to weekly after month 10 has been paid. Month 10 contains weeks 40 - 44, so these weeks have been paid and the NI for those weeks has also already been paid. There are 2 days at the end of week 44 that have not yet been paid. Month 4 ends on a Wednesday which means that Thursday and Friday would be paid in the next period.
We are changing to a weekly pay frequency, so the next whole and relevant period is week 45. By jumping to week 45 we miss the two pay days in the previous period, Thursday and Friday. To balance the pay we will have to add those days into week 45. In week 45 we are now paying all of week 45 and the two days of week 44 that were missed.
You can find a copy of the Tax Calendar by going to 'Help > Tax Periods.' This will help you to plan when to change pay frequencies by letting you know when one tax week ends and the next begins.
Weekly to Monthly
Follow this process if you are changing from weekly, 2 weekly or 4 weekly to monthly.
- Find the last full period you can pay from your previous frequency without entering a new month.
- The next month will then be the first full monthly pay
- Any days/weeks that you have skipped over will need to be added into that monthly pay. This would require you to work out how much money the employees would have worked for those weeks/days and add that amount into the new pay rate.
This example if from earlier in the tax year to show it possible to change pay frequencies at any time of year. This example shows changing from 2 weekly to monthly, after 2-weekly 11-12 has been paid. weeks 9 – 13 are included in tax month 3. Therefore next month is tax month 4 and is the month that we will be changing to the monthly pay frequency. However week 13 is still unpaid as it is in tax month 3. The pay for week 13 will need to be included in the next months pay.
Making the Change in Qtac
To change the pay rate for an employee all you need to do is create a new pay rate in “Employee Maintenance > Pay Rates”.
- You should already see current pay rate that your employee is on
- You cannot delete this rate at the moment as you would have no active pay rate
- First you must create a new rate by clicking “Add New”
- You will now be able to select the “Pay Frequency” for the pay from the far left hand drop down box
- The “Effective Date” is only for the software to figure out which pay rate that it needs to use. This information does not get sent to the revenue. As long as the date you choose is the most current date out of all of your pay frequencies and is not in the current period it will be fine.
- Choose the calculation type of “Gross to Net” or “Net to Gross” depending on how you want the calculation to happen.
- If the pay is salaried check the “Salaried” tick box
- Enter in the Standard Hours if they are known
- Add in a “Rate Per Hour”. If the pay is not salaried this will be the default rate appears in “Open and Pay”
- If the pay is “Salaried” then enter the annual amount that the employee earns
- Once you are happy that your details are entered correctly click “Save Rate” to apply the rate.
- If you wish you can now delete the old pay rate.