Tax - Setup (An overview)

It is especially important to do setup checks before processing data when the payroll has been first installed and then at the beginning of each tax year.

This will ensure that PAYE will be calculated properly and that the results are correct.  Check to ensure:

• that the Tax Parameters are setup correctly from the first period of each tax year
• that the Tax Method and Tax Table Type are set correctly for each Employee
• Ensure that earnings Transaction Codes are set up correctly as taxable, or non-taxable
• Ensure that the earning are set up correctly as either Regular Earnings or Irregular earnings
• Check that the P6 fields have been correctly assigned to each Transaction Code.

After processing data, but ideally before payment, in each period ensure that PAYE has been calculated properly and that the results were correct:

• Print out and check the Tax Display of a small sample of employees, especially at the beginning of new tax year.
• Do reasonableness checks.  If the PAYE of an employee is unusually high or low double check the PAYE calculation using the Tax Display.