When you setup an employee and specify the employees pay rate under the ‘Employee’ > ‘Employee Maintenance’ ‘Pay Rates’ tab, you can set whether the employee is paid on a ‘Gross to Net’ or ‘Net to Gross’ method.
You can change the calculation type from ‘Gross to Net‘ to ‘Net to Gross‘ (or vice versa) when you are in ‘Open and Pay’ for an employee. The image below highlights (in the top left) where you can change the calculation type:
What is Gross to Net?
This is when an employee is paid ‘Gross’ and then any deductions are taken (for tax and NI etc) leaving the employee with a ‘Net’ figure. The net pay figure is the amount the employee would be paid. So you enter a ‘Gross Pay’ figure, Tax/NI and any other deductions are taken and then you are left with a ‘Net Pay’ figure.
What is Net to Gross?
This is the opposite of Gross to Net. This is when you can enter a ‘Net Pay’ figure and when calculating, any Tax and NI is added on, giving you a ‘Gross’ amount’. Whatever you type in as a ‘Net Pay’ figure will be the figure the employee would be paid. You make use this net to gross method when working out pay for employees who are paid case in hand for example.
So you enter a ‘Net Pay’ figures, Tax and NI is added to this, working out a ‘Gross Pay’ figure but leaving you with the ‘Net Pay’ figure you want to pay the employee.
A little bit about us...
Qtac, a recognised payroll solutions provider in the UK, has been serving businesses for 30 years. Specializing in both payroll software and outsourced payroll services, Qtac caters to small businesses, large corporations, and payroll bureaux. Our software, recognised by HMRC, streamlines the payroll process, featuring RTI submissions, workplace pensions management, and a cloud-based portal for payslips and employee self-service. This software is supported by top-tier customer assistance, ensuring a smooth payroll experience.
Additionally, Qtac offers tailored ‘white-labelled’ outsourcing services. These services are particularly attractive to accountancy firms, as they save time, reduce stress, and mitigate payroll-related risks. By outsourcing to Qtac, companies can be confident in the knowledge that their payroll needs are being expertly managed.
Qtac's solutions are not just about functionality; they are about building long-lasting relationships with clients, offering them a combination of technology and expertise. Their commitment to adapting to client needs and providing reliable, efficient services has established Qtac as a trusted name in the payroll solutions sector in the UK. In essence, Qtac simplifies and enhances the payroll process for a diverse range of clients, ensuring compliance, efficiency, and customer satisfaction.
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