Sage 50 Payroll: Key Features

In Business Management Software, Process Improvement, Sage 50 by David

Reading Time: 8 minutes

I’ve supported and implemented the Sage 50 Payroll software for over 6 years and it still astonishes me to this day that people are still not utilising some of the great features in the software, which in the long run, will make your life a whole lot easier.  Below I talk a little bit about my favourite features.

Sage 50 Payroll Nominal Link

Probably the most underused area of the software either because people don’t know it is there, they think it will only work if posting Sage to Sage, or they just don’t understand what Nominal Link means as payroll is only a small part of their job, and someone else is dealing with the accounts side of the things.

So what is the nominal link?  The nominal link allows you to post your salary journals either directly to Sage 50 Accounts / Sage 200 Accounts OR to file for an import / manual import into your accounts software.  Once set up, in a click of a button your salary journals are put together automatically to save you having to do it or your Accounts department.  Instead, you can send them the journals they need to post.

It can be a nice simple salary journal with all the values going to one nominal code each (see example).

no overrides

OR you can setup the overrides so that you can post each employees costs to their relevant department in accounts (see example).

overrides

Useful Links

Sage 50 Payroll Salary and Factored Pay elements

Another underused area in the payroll software is the salary payments option.  To process payroll, you need to set up different types of pay elements (payments, deductions, loans, net payment etc.).  I have found that people will always set up a pay element called salary.  They then need to work out what each individuals salary for the relevant pay frequency and for any overtime work out the hourly rate.

The best way to do this is to set up the salary and hours worked within the employee record.  This then allows the software to work out the employees pay based on the pay frequency i.e.       £24,000 ÷ by 12 = £2,000 for the monthly salary.  This is automatically subject to tax and NI.

Employee Record

By also putting in the number of hours worked per week it will also work out the hourly rate.

Salary ÷ 52 ÷ hours worked = hourly rate

The calculation above can then in turn be used to set up further pay elements, this is known as Factored Payments.  The system will allow you to create a pay element based on a one already setup.  It can be calculated as either a percentage or a sum and any changes made to the base payment automatically updates the factored payments.

Edit Payment Screen

An example of this would be overtime.

Salary ÷ 52 ÷ hours worked = hourly rate £24,000 ÷ 52 ÷ 37 = £12.47
Hourly rate x 1.5 = Overtime at time and a half £12.47 x 1.5 = £18.71

Pay Elements Screen

Factored Payments Setup Screen

Factor Payment Settings

Sage 50 Payroll IR Secure Mailbox

The next one is the IR Secure Mailbox.  This is a direct link to your HMRC Gateway account.  Instead of having to leave the payroll software to go and check for any new notifications, you can now check for the notifications within the payroll software, and also apply changes directly without having to note the details down and go and change yourself.  The notices you can receive are as follows:

  • P6 & P6(B) – Notice to an employer of a change of employee’s pay and previous pay and tax
  • P9 – Notice to employer of a change in employee’s tax code
  • SL1 – Notice to start a student loan deduction
  • SL2 – Notice to stop a student loan deduction
  • NVREP – The NINO Verification Reply (NVREP) is a message sent to you by HMRC in response to a NI number Verification Request (NVR) message. It’s used to correct or confirm National Insurance (NI) number information.
  • NOT – You might receive a NI number verification notice (NOT) after you submit an FPS. HMRC automatically check that the NI number is present and correct and sends an appropriate response.

Sage 50 Payroll Import Timesheets

Running a weekly payroll?  Ever feel like your always trying to catch up with yourself?  Just hit that FPS button and you’re already entering the hours for next weeks payroll.  It can be a very time consuming / mind-numbing task entering the weekly hours into your payroll.  STOP NOW, you’ve probably already got the information in an Excel spreadsheet or a photo / scanned image sent via an e-mail from your managers.  If this is the case, you don’t need to be typing the details again. They’ve done that for you already. All you need to do is to import the timesheet into the payroll software saving you from mind-numbingly entering the hours in again, then double checking and double-checking again.

Quick and easy to set up a timesheet import and even quicker again to upload on a weekly basis.  No more putting off work as you need to pay your employees, no more having to catch up on before or after your normal hours.  You might even find yourself having a spare hour to yourself BUT don’t tell the boss. Put your feet up and enjoy a nice cup of tea and a KitKat.

How do I do this I hear you say.  Well, you do need to spend time at the beginning setting it all up so you can recoup the time at the other end.

Tidy up your pay elements (the best time to do this is after you have submitted your PYE).  Remove the duplicate pay elements have one Basic Pay set up as a Fixed status (you can change the hours and date in the employee’s record, and change the hours in Enter Payments).  You can then have other pay elements linked to this as your Base Rate.  i.e. set up Overtime @1.5 as a Factor status (this takes their rates from existing payment calculating as a sum or percentage of the base rate) OT = 1.5 times the base rate.

This will not only help you now in setting up your new rates but with any pay rises you only ever need to update the Basic Pay and all other changes will filter down the chain.

Once all tidying up is done you should have a pay element screen looking like the one below.

Pay Elements Settings

On this example there is still quite a number of pay elements for the different types of payments but we no longer have any duplicates.  Just one Basic Pay which will be used on all employees and their individual rates set in the employee records (see screenshots below).

Pay Elements 2

You can print a report of all the pay elements to review internally or with the payroll department.

Reports > Company > Payment Types

Payment Report

To set the pay elements on the employees this can be done individually via Employee Record > Employment > Pay Elements > Add payment.  Or better still using Tasks > Global changes > Payments> Add Payment where you can add payments globally to everyone at the same time or to smaller relevant groups i.e. only select Fire Marshalls and apply that pay element to them.  You can also set the rates globally via Tasks > Global Changes > Payments > Change Rates.

Once you have setup your pay elements and employee records with the pay elements and rates, it is time to setup the timesheet entry in Excel.  You can create one LARGE timesheet for all employees, or more sensibly, break it down into departments / shifts and send the relevant spreadsheet to the relevant manager.

Global changes

To create the timesheet select a group of employees.  Select the department (Transport – Westgate) from the outline tree > click Swap at the top of the window.

timesheet ees

Select Payroll on the stack bar (bottom left) and then under Tasks (top left) click Time Sheet Entry.  From that screen, click ‘Create Template’ this will ensure that the correcting headings are exported so that when you come to import you don’t have to mess around with field mappings.  This will not export the employee names but this can be easily fixed by using ‘Send to Excel’ and a simple copy and paste to move the names across.

Enter HoursExcel Spreadsheet

Once your template has been exported, save this somewhere and report the process for each department.

These are now your blank templates. You can distribute these to your managers to fill in. They can then e-mail these back to you all filled in and ready to import into the payroll software.

Excel Spreadsheet 2

To import the timesheet you need to go to File > Advanced Data Import

Menu

Data Import Wizard  

Always take a backup > once complete click NEXT.

Data Import Wizard 2

Scroll down and select Timesheet Payments

 

File ExplorerBrowse for your file (ensuring you change the file type you are looking for to Excel Files and that you leave the option Import File has header row? ticked) click Open > Next.

Data Import Wizard 3

There should be no need to do any mappings at this point as we have used the template create in Sage > Click Finish.

Import Screen

All your payments have now imported successfully.

You would need to repeat the above for each department with all payments and deductions if required.

You can now go ahead and make any changes for statutory payments, attachments of earnings plus any ad-hoc changes.

Now onto running your Pre-update reports.

So as mentioned above. No more hours on end entering figures and double checking.

It is now all done in a couple of clicks due to the work is put in beforehand.