Payroll Benefits
When calculating payroll benefits, such as those related to the cars, you would start by managing the assets page.
- Add New Asset
- Assign the Asset to an employee
Once the asset has been created and assigned, payroll benefits will be automatically created within payroll based on the given values.
Car Benefits in Payroll
If this is a car, the details of the car will be added to the FPS Submission automatically for the HMRC reporting side.
When saving the payslip, the yearly Cash Equivalent of a car will be added to the employee's taxable pay at a pro-rata amount, based on the number of pay periods.
For example, if the cash value is £2400 a year, £200 will be taxed (for a monthly payroll).
If their gross pay is £1700, it will be increased to £1900, and they will then pay tax based on the higher value.
This way, they will pay the Tax on the Benefits as they go along instead of reporting it once a year through a P11D Submission.