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How to transfer an employee from one PAYE scheme to another

Updated

Available for the following plans: Employment Plus, Employment Unlimited
Available for the following HR plans: Premium, Platinum
Available for the following user access levels: Admin

This article covers the steps necessary for UK - Multi PAYE HR+payroll connected orgs to transfer an employee from one PAYE scheme to another. The expectation/requirement is that there is one HR record, and then multiple payroll records which clearly show service at each PAYE scheme of leavers/active.

1. Terminate

  1. Firstly you need to terminate the employee from the org you wish to transfer them from. 

  2. Navigate to the Employee's Profile and prepare to offboard them.

  3. Set the Leave Date: Set this to the last day of their employment under the current scheme (e.g., 31st of May).

  4. Select Termination Type: Choose Transfer (e.g., transitioning from PAYE Scheme 1 to PAYE Scheme 2).

  5. Complete Offboarding: Finalise the process to terminate the current payroll record.

  6. Read more about Terminating an employee here.

2. Reactivate

  1. Click on People.
  2. Navigate to the Employee's record.

  3. Reactivate the Record: Click reactivate on the employee's profile.

  4. Set the New Employment Date: Set this to the first day of the new PAYE scheme—typically the day after the leave date (e.g., 1st of June).

  5. Onboarding Checklists: Select whether or not to trigger an onboarding checklist based on preference (or select No if doing it manually).

  6. Confirm Reactivation: Review the system prompt regarding what happens upon reactivation and proceed. 

  7. There will also be a system pop-up window that appears right before confirming reactivation to help guide users through the workflow.

  8. Read more here.

3. Apply the continuous service date

  1. Change this back to the employee's original start date with the company (e.g., 01/11/2025) to ensure continuous service is recognised.

4. Update the pay schedule/scheme

  1. Update Pay Schedule: Change the schedule to reflect the new PAYE scheme (e.g., changing from Monthly PAYE 1 to Monthly PAYE 2).

5. Complete error messages

Because this generates a new payroll record, specific details will clear down for compliance/accuracy and must be re-entered:

  • Banking Details: Re-add the employee's banking information (bank details clear down automatically in case there is a change or a gap in employment).

  • Tax and NI Details: Treat them as a new starter. Either complete a new Starter Checklist or enter the P45 details generated from the previous PAYE scheme.

    • Note: If using the P45 from the previous scheme, ensure the figures and the leaving date (e.g., 31st of May) reflect the latest payroll run data.

  • Pension Settings: Re-apply pension settings as required for a new starter.

6: Verify the Records

  1. Refresh the Page: Ensure all system error messages and outstanding action items have cleared.

  2. Verify in Payroll: Check the payroll employee list. You should now see:

  • A Terminated Record linked to the old PAYE scheme (e.g., PAYE 1).

  • An Active Record linked to the new PAYE scheme (e.g., PAYE 2), ready for the next pay run.

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