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Managing an employees tax and national insurance (NI) | HR Employee File

Jimmy
Updated

Overview

National Insurance, which is often abbreviated to NI (or NIC, National Insurance Contribution or NINO), is money that is paid to Her Majesty's Revenue and Customs (HMRC) by employers, employees, and those who are self-employed. It remains a Government Scheme and anyone working in the UK earning over a set threshold must pay into the scheme.

The Tax and National Insurance feature within the Employee File module changes depending on whether you have a connection to one of our payroll offerings or you have an HR Only platform. If you have no connection to a payroll platform, then you can use this feature to edit your employees' Tax and National Insurance details. 

If you have connected Employment Hero to a payroll platform, the Tax and NI page is read-only with the details stored and managed via your payroll platform. An Administrator or the employee must complete this screen during onboarding to make sure the first sync to payroll occurs and then the screen will become read-only thereafter. 

Maintain

  Select the payroll platform you integrated with for the relevant instructions. If you do not have an integrated payroll product, click the HR Only tab.

HR Only EH Payroll KeyPay Xero

Availability

HR Plan:   Standard   Premium   Platinum
  User Access:   Employee         Manager         Admin      

  This is the default access level per user and whether they have  view,  edit and  delete access, excluding any changes made via our Custom Security feature.

Edit tax and NI details
  1. Click the   Personnel menu.
  2. Click the Employees submenu.
  3. Select the employee that needs their details updated.
  4. Click the Tax and NI Details tab.
  5. Complete the following fields in the Tax and NI Details section:
    • Do you have a P45 form?
    • Employee statement.
    • This employee has previously been reported
    • Tax code:
      • Use W1/M1.
    • Has a student loan:
      • Student loan type:
        • Plan 1.
        • Plan 2.
    • Has post grad load.
  6. Complete the following fields in the National Insurance Details section:
    • National insurance number (NINO).
    • National insurance category:
      • Category A - Standard rate (most employees).
      • Category B - Reduced rate (females only, married/widows).
      • Category C - Pensioners (employees over state pension age).
      • Category H - Apprenticeships for U25.
      • Category J - Deferred rate (employee has another job).
      • Category M - Standard rate for U21.
      • Category Z - Deferred rate for U21 (Employee has another job).
    • Company directory.
  7. Complete the following fields in the previous Employer (P45) section:
    • Employee PAYE reference:
      • Office number.
      • Reference number.
    • Leave date.
    • Student loan deduction to continue.
    • Tax code at leaving date:
      • W1/M1.
    • Last entries on the P11 deductions working sheet.
    • Total pay date.
    • Total pay to date.
  8. Click the Save button.
    Tax__UK_HO__1.jpg

Author Recommended

So you have now viewed your employees' Tax and NI details and you are now wondering what next can I do. There are two recommendations I would make on this front and they are:

  • HR employee file: Pension details This feature is where you can see an employee's pension details; if these details are incorrect, you will need to update them via your payroll platform.
  • HR employee file: Banking details This feature is where you can view and, if needed, update the bank account details associated with this employee file record.
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