Determining Net Pay
Unit summary
This unit is about determining the net pay that employees should receive. You need to demonstrate that you input deductions from net pay accurately into a computerised system and you also need to show that you calculate net pay manually when this is necessary, for example where a query has been raised.The first learning outcome is about calculating and verifying net pay. You need to show that you ensure that only those employees who are entitled to receive pay in the current pay period are included. You are required to input all relevant pre- and post-tax deductions, produce and distribute payslips and check net pay totals.The second learning outcome is about reconciling aggregate payroll totals against control totals. This includes calculating sums recoverable from the National Insurance Contributions and netting them off against payments due.Throughout the unit you need to show that you maintain confidentiality of employees’ personal details and that you meet organisational and statutory deadlines.
Unit details
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15 Business, Administration and Law
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15.1
Accounting and Finance
Assessment Methodology: Independent assessment is mandatory for this unit
You must have knowledge and understanding of:
The Statutory Framework
1. Data Protection legislation (LOs 73.1, 73.2)
2. PAYE regulations in respect of the manual calculation of gross to net pay (LO 73.1)
3. PAYE regulations in respect of charitable giving (LO 73.1)
4. Social Security regulations governing contributions in particular the manual calculation of gross to net pay (LO 73.1)
5. Pension legislation in respect of tax relief (LO 73.1)
6. Attachment and Arrestment of Earnings assessment and deduction (where single orders apply to the employee)
7. Income tax regulations as they apply to the recovery of student loans
The Organisation
8. Checking validity of all employees (LO 73.1)
9. Timescales and schedules for despatching payslips (LO 73.1)
10. Information flows within the organisation (LO 73.2)
11. Procedures for the security and confidentiality of information (LO 73.1, 73.2)
12. Procedures for initiating and monitoring payments (LO 73.1)
13. Methods of disbursement (LO 73.2)
14. Information and timescale requirements of systems for transmission of disbursements to employees (LO 73.1)
Techniques and Methods
15. How to use tax and National Insurance tables to perform manual calculations of net pay
16. How to set up and use spreadsheets for reconciliations and the manual calculation of net pay
Unit 73 of the AOSG Level 2 in Payroll Administration
FSSC has formally supported this unit (please see letter of support attached in the qualification need/support section)
| Learning Outcome |
Assessment Criteria |
| 73.1 Calculate and verify net pay |
73.1.A Check the payroll status of all employees for validity for the pay period
73.1.B Accurately input any applicable contributions to occupational pension schemes
73.1.C Accurately input any applicable charitable giving contributions
73.1.D Accurately input all relevant statutory deductions for attachment and arrestment of earnings
73.1.E Accurately input all relevant statutory deductions for student loans
73.1.F Accurately input all relevant statutory deductions for income tax
73.1.G Accurately input all relevant statutory deductions for National Insurance contributions
73.1.H Accurately input all relevant non-statutory deductions for pension contributions
73.1.I Accurately input all relevant non-statutory deductions for recovery of overpayments
73.1.J Accurately input all relevant non-statutory deductions for repayment of loans and advances
73.1.K Accurately input all relevant non-statutory deductions for voluntary deductions
73.1.L Produce and distribute accurate and legible payslips in accordance with statutory and organisational requirements
73.1.M Contribute to the resolution of individual employees’ queries by checking net pay calculations manually, using the appropriate tax and National Insurance tables
73.1.N Check net pay totals to ensure that the full range of applicable allowances and deductions has been made
73.1.O Check net pay figures against the parameters for the payroll concerned and resolve any discrepancies or refer them to the appropriate person for resolution |
| 73.2 Ascertain and reconcile aggregate payroll totals |
73.2.A Reconcile actual payroll totals against authorised totals for all pay periods
73.2.B Reconcile the number of no pays and actual pays promptly with the number of employees on the payroll
73.2.C Ensure that aggregate Statutory Sick Pay payments are correctly calculated and reconciled against control totals
73.2.D Ensure that aggregate Statutory Maternity Pay payments are correctly calculated and reconciled against control totals
73.2.E Ensure that aggregate Statutory Adoption Pay payments are correctly calculated and reconciled against control totals
73.2.F Ensure that aggregate Statutory Paternity Pay payments are correctly calculated and reconciled against control totals
73.2.G Ensure that aggregate employee and employer pension contribution deductions are correctly calculated and reconciled against control totals
73.2.H Ensure that aggregate charitable giving deductions are correctly calculated and reconciled against control totals
73.2.I Ensure that aggregate recovery of overpayment deductions are correctly calculated and reconciled against control totals
73.2.J Ensure that aggregate repayment of loans and advances deductions are correctly calculated and reconciled against control totals
73.2.K Ensure that aggregate voluntary deductions are correctly calculated and reconciled against control totals
73.2.L Check aggregate statutory payments for Statutory Sick Pay against control totals
73.2.M Check aggregate statutory payments for Statutory Maternity Pay against control totals
73.2.N Check aggregate statutory payments for Statutory Adoption Pay against control totals
73.2.O Check aggregate statutory payments for Statutory Paternity Pay against control totals
73.2.P Accurately calculate sums recoverable from the National Insurance Contributions Office in respectof Statutory Sick Pay and net them off against payments due
73.2.Q Accurately calculate sums recoverable from the National Insurance Contributions Office in respectof Statutory Maternity Pay and net them off against payments due
73.2.R Accurately calculate sums recoverable from the National Insurance Contributions Office in respectof Statutory Adoption Pay and net them off against payments due
73.2.S Accurately calculate sums recoverable from the National Insurance Contributions Office in respectof Statutory Paternity Pay and net them off against payments due
73.2.T Accurately calculate and reconcile aggregate amounts payable to HM Revenue and Customs in respect of tax against control totals
73.2.U Accurately calculate and reconcile aggregate amounts payable to HM Revenue and Customs in respect of employee and employer National Insurance contributions against control totals
73.2.V Accurately calculate and reconcile aggregate amounts payable to HM Revenue and Customs in respect of student loan deductions against control totals
73.2.W Accurately calculate and reconcile aggregate amounts payable to the courts in respect of attachment of earnings against control totals
73.2.X Accurately calculate and reconcile aggregate amounts payable to the courts in respect of Scottish arrestment of earnings against control totals
73.2.Y Accurately calculate and reconcile aggregate amounts payable to the Child Support Agency in respect of child support orders and attachment of earnings orders against control totals
73.2.Z Calculate and reconcile aggregate amounts payable to local authorities in respect of attachment of earnings against control totals
73.2.AA Calculate and reconcile aggregate amounts payable to a pension provider in respect of employee and employer pension contributions against control totals
73.2.BB Calculate and reconcile aggregate amounts payable to bodies responsible for miscellaneous deductions in respect of charitable giving against control totals
73.2.CC Calculate and reconcile aggregate amounts payable to bodies responsible for miscellaneous deductions in respect of recovery of overpayments against control totals |
| 73.2 continued: Ascertain and reconcile aggregate payroll totals |
73.2.DD Calculate and reconcile aggregate amounts payable to bodies responsible for miscellaneous deductions in respect of repayment of loans and advances against control totals
73.2.EE Calculate and reconcile aggregate amounts payable to trade unions in respect of voluntary deductions against control totals
73.2.FF Calculate and reconcile aggregate amounts payable to social clubs in respect of voluntary deductions against control totals
73.2.GG Resolve discrepancies and where they cannot be resolved, refer them to the appropriate supervisor(s)
73.2.HH Meet all organisational and statutory timescales |