Day to day PAYE
In this section:
Using the Employer CD-Rom P11 Calculator
The P11 Calculator works out the tax and National Insurance contributions (NICs) for each employee every pay period. This means you don't need to refer to tax and NICs tables. It's also easier than using the separate PAYE and NICs calculators with the paper form.
From April 2008 - provided certain conditions are met - employers with nine or fewer employees can file the Employer Annual Return (forms P14 and P35) online automatically from the CD-Rom. (If you have more than nine employees you can use the calculator figures to complete your online return separately - or to complete the paper return.)
This guide tells you how to get started using the P11 Calculator, including where you can find it and what information you'll need to have to hand when you start using it. It also gives the detail on when you can file online direct from the CD-Rom and provides important information on employer online filing deadlines.
On this page:
- The P11 Calculator - features and benefits
- P11 Calculator limitations
- Getting started with the P11 Calculator
- Using the P11 Calculator to work out tax and deductions
- PAYE Online filing - deadlines and tax-free payments
The P11 Calculator - features and benefits
The P11 Calculator will save you time and reduce the likelihood of error when operating PAYE. Its key features are outlined below.
Works out PAYE tax and NICs
The P11 calculator works out the tax and National Insurance contributions (NICs) for each employee every pay period. This means you don't need to refer to tax and NICs tables. It's also easier than using the separate PAYE and NICs calculators with the paper form.
Automatically completes the P11 Deductions Working Sheet
If you use the P11 Calculator to work out an employee's tax and NICs deductions, it'll complete all the relevant columns of an electronic version of the P11 Deductions Working Sheet for you. You won't need to complete the paper version of the P11.
Checks P45s
When you take on a new employee who gives you a form P45, you can use the automatic P45 checking feature to help you work out whether the total tax figure on their P45 is correct.
Handles mid-year tax code changes
The calculator can deal with tax code changes during the tax year. If we send you form P6 giving you a new tax code for one of your employees, all you'll need to do is enter it and the calculator will do the rest.
Produces P11 summaries
You can use the P11 Calculator to produce an up-to-date P11 summary at any time during the tax year.
Produces P32 summaries
You can use the P11 Calculator to produce a form P32 deductions summary each pay period. This shows you each month what you need to pay over to us to cover tax, NICs and student loan deductions for all the employees entered in the calculator's database.
Allows you to save in-year figures to a spreadsheet
The P11 Calculator allows you to save P11, P14 and P32 information to a folder of your choice in a spreadsheet application. These figures form part of the PAYE records you must keep for at least three tax years after the current tax year. You can also use them to complete your online or paper returns.
Produces end of year summaries
The P11 Calculator will produce an end of year summary which you can use to complete your end of year returns (P14s and P35s). You can file these online using PAYE Online for Employers.
Allows seamless online filing if you have nine or fewer employees
If you have used the P11 Calculator to work out your employees' deductions for the whole of 2007-08, and had nine or fewer employees at 5 April 2008, you can file forms P14 and P35 online direct from the CD-Rom. This applies even if you had more employees during the year - provided they were all entered into the database. To find out about deadlines for all employers to file PAYE online read the later section 'PAYE Online filing - deadlines and tax-free payments'.
If you have more than nine employees you can still use the figures to complete your online return separately - or to complete the paper return.
Deals with leavers
If an employee leaves during the tax year, you can enter their leaving date into the employee part of the employer database. You will then be able to view an in-year leaver summary. This'll give you the information you need to complete their P45.
Transfers employee details to a new year
If you use the P11 Calculator for consecutive years, you can transfer employee details in the database from one year to the next. This means you can use the new version of the calculator from the latest Employer CD-Rom without having to re-enter each employee's details into the database.
Works out student loan deductions
From April 2008 you'll be able to use the P11 Calculator to work out student loan deductions for employees who are repaying their student loans. You won't need to use the separate student loan calculator.
Accepts updates
Once you've installed the CD-Rom, you can download updates and improvements to certain sections of it from the HMRC website whenever they're released.
P11 Calculator limitations
Bear in mind that the P11 Calculator isn't a fully integrated payroll software product. For example, although you can use it with our separate net pay estimator, the P11 on the CD-Rom doesn't:
- record pension contributions
- record any other deductions unrelated to PAYE
- produce payslips
You may also experience some difficulties using the calculator if:
- certain director's NICs category letters change during the tax year
- an employee dies and you want to work out the final payment
- an employee reaches the age of 16 and becomes liable for NICs (in order to be able to switch to category A mid-year you need to have already set them up in the calculator with an 'X' against their NICs category)
The calculator also can't currently cope with a change of pay interval.
If you think these limitations could affect your business, you should consider upgrading to a commercial payroll software package.
Choose a suitable payroll system for your business
Getting started with the P11 Calculator
The P11 Calculator is currently only available on the Employer CD-Rom. We'll send this to you when you register as a new employer. If you're already an employer, we'll send you the latest CD-Rom as part of the Employer Annual Pack. You'll also get an updated CD-Rom each year reflecting any changes announced in the Budget. We normally send this out in May.
You can order a copy of the Employer CD-Rom online or from the Employer Orderline on Tel 08457 646 646 (open from 8.00 am to 8.00 pm Monday to Friday and from 10.00 am to 1.00 pm on Saturdays, closed on Christmas and New Year bank holidays). You can also order a copy by fax on Tel 08702 406 406.
Order a copy of the Employer CD-Rom online
Installing the Employer CD-Rom
To use the P11 Calculator, you'll need to install the Employer CD-Rom onto your computer (if you just run it without installing it you won't be able to use the calculator). You'll find the installation instructions and system requirements on the back of your CD-Rom cover. Once you've installed the CD-Rom you can download any available updates from our website.
Find out about downloading updates for the Employer CD-Rom
Accessing the P11 Calculator
You can access the P11 Calculator by selecting 'Calculators' from the menu on the home page of the Employer CD-Rom, and then selecting 'P11 Calculator' from the pop-up menu. This will take you to the P11 Calculator home page. From here you can choose from the following options:
- P11 Calculator
- employer database
- P45 checker
- back up your data
Setting up the employer database
The P11 Calculator uses employee information held in an employer database. To set this up select the 'Employer database' option from the P11 Calculator home page and follow the on-screen instructions.
To set up the employer section you'll need the following information:
- your business name
- your address and postcode
- the date your tax year ends
- your employer PAYE reference (sent with your New Employer Pack)
- your Accounts Office reference (as above)
To set up the employee section you'll need the following:
- each employee's full name and address
- National Insurance number
- date of birth
- works number (if there is one)
- department (if there is one)
- tax code
- National Insurance category letter
- whether they're a director
- whether they have a student loan
- their pay interval
- their start date if they started working for you during the current tax year
- previous pay and tax details from their previous employment if they started work during the current tax year and have given you a P45
Once you've added all your employees, you're ready to use the P11 Calculator.
Using the P11 Calculator to work out tax and deductions
To work out the deductions for an employee, enter the P11 Calculator, select the relevant employee from the list and then enter their:
- payment date
- gross pay in the pay period
- earnings for NICs purposes if different from their normal gross pay
- details of any statutory payments you've made during the period (leave blank if not applicable)
If you've received a P6 giving you a new tax code for an employee, you'll also need to enter the revised code into the calculator.
Once you've completed your entries you'll be able to see them on the confirmation screen. You must save them to be able to use them in the P11 Calculator. It will then use this information to work out the tax and NICs that you need to deduct from your employee's pay and it will fill in the entries in their P11
Statutory payments
You can use the statutory pay calculators on the CD-Rom or HMRC website to work out any statutory pay amounts.
Gross pay
Bear in mind that gross pay for tax purposes won't necessarily be the same as earnings for NICs purposes. Refer to our booklet CWG2 'Employer's Further Guide to PAYE and NICs' if you're unsure.
View booklet CWG2 'Employer's further guide to PAYE and NICs' (PDF 462K)
Use the online statutory payments calculators to work out statutory payments
Viewing an employee's completed P11 Summary
Each time you pay an employee during the tax year the P11 Calculator will work out the entries for their P11 and complete the form for you. You can view any employee's P11 Summary at any time.
Backing up your records
If you use the P11 Calculator to work out and record your wages, we recommend that you save the data regularly and back it up after each pay period. You can back up data and save it on to floppy disc, CD-Rom or a USB memory stick, depending on your computer's specification.
Find out how to back up your P11 data
Download a detailed guide to using the P11 calculator (PDF 990K)
PAYE Online filing - deadlines and tax-free payments
If you have 50 or more employees you must file your Employer Annual Return (forms P14 and P35) online now. If you have fewer than 50 employers, you do not have to file online until at least 2010 but you can get tax-free payments for filing online before then.
Remember, if you have nine or fewer employees in your database on 5 April you can use the P11 Calculator to link through and file your end of year returns online.
There are separate deadlines in 2009 and 2011 for filing P45s and P46s online.
You can read more about online filing deadlines and tax-free payments by following the link below.
Find out about employer deadlines for online filing
Register for or use the PAYE Online for Employers service
PAYE Online filing - deadlines and tax-free payments
More about sending your Employer Annual Return online from the CD-Rom
