Tax - FDS Method Change

Why is it necessary to change the Tax Method?

When an employee is engaged during the course of tax year it is not possible to for their PAYE to be calculated using the FDS Methods of calculating PAYE because the income from prior periods is not in the payroll.  Instead, the PAYE Tax Method is used for the remainder of the year. See this link for more information on Tax Methods.

At the beginning of any new tax year any employees on the PAYE method should then be changed to be using the FDS Forecast method (recommended).

How to check the Tax Method being used for each employee.

Use the 'Employee Master - 3 Line Detail' report to check the payroll for Tax Methods employed to employee.  It can also be see on the 'Tax' tab for each employee in the 'Employee Master'. 

Changing the Tax Method - one employee at a time

Changing the tax method can be done one at a time on the tab.  To do this:

- Go to the 'Edit' then 'Employee Master' menu options

- Select the employee being queried

- Go to the 'Tax' tab

- Note the tax / change the Tax Method being used using the dropdown menu.

Changing the Tax Method - in bulk

Use the 'Tax Method Convert' utility, especially at the beginning of the tax year, to ensure that all employees are converted to the 'FDS Forecast' method (recommended) or other selected method of calculating tax.