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Creating an employee

You can license your Sage One Payroll service for a maximum of 5, 10 or 15 employees.

To create an employee

  • 1. Employees > Create Employee.
  • 2. Enter the employee’s details > Save. Mandatory areas are marked with an asterisk. For further information about the options available, please refer to the following section.
  • 3. Employees > check the Status column. If any further action is needed to make the employee active, this shows here.

The employee is now active in the payroll. HMRC is informed of this automatically as part of the relevant Full Payment Submission (FPS).

You cannot add an employee to a completed pay run. If you need to do this, for help please contact Sage One Payroll Support. Our Support team may be able to suggest a workaround for you.

The options available on the employee record

Item Description
Personal Details Basic information about the new employee, including their National Insurance (NI) number.
If you can’t find the employee’s NI number:

* Keep a record of their first name(s) and surname, address, date of birth, and gender.
* Send Form P46 to the Tax office. HM Revenue & Customs National Insurance Contributions Office will automatically trace the employees NI number. They will then send you a CA6856 form confirming the number.
Contact Details The employee’s postal address, telephone number and e-mail address.
Pay Cycle The duration of each pay cycle. This can be weekly, two weekly, four weekly or monthly.
Contracted Weekly Hours The number of hours the employee is contracted to work per week in this employment. This
option only appears if you’re operating RTI.
RTI Pay ID A unique employee ID code used in RTI reporting. If this doesn’t already exist, Sage One Payroll generates one for you.

If the employee already has an RTI Pay ID, make sure to specify it correctly. Otherwise, RTI reporting problems may occur.

This option only appears if you’re operating RTI.

Although the ID automatically generates, if necessary you can change this. To do so, please contact Customer Services.
Works Number The unique code that identifies the employee in the company.
Start Date The date when the employee started employment with the company.
Finish Date The date when the employee finished employment with the company. If you specify a finish date, Sage One Payroll treats the employee as a leaver.

In the case of a closing business, you should mark every employee as a leaver before you complete the final pay run.
Payment Method The method by which the employee receives their pay.
Is a Director If the employee is a director of the company, select this check box. NI calculates differently for a director than a normal employee.

When you select the Is a Director check box, you must also select the following settings:

Directorship Started

You can use this drop-down list to specify whether the employee became a director in a previous tax year, or during the current tax year.
If the directorship started in the current tax year, you must also specify the start date.

Preferred Calc Method

You can calculate Directors’ NI in two different ways. Each method gives the same NI liability amount by the end of the tax year, although NI payments during the year can be quite different under the two methods.

* Calculate NI Cumulatively

This is the default calculation method. It is most common for directors who are paid irregularly by the company, and uses annual earnings thresholds to determine the director’s NI liability in a particular pay run. The director is not liable for NI until their total earnings during the tax year exceed the Annual Primary Threshold. Find out more about this calculation method.

* Calculate NI Per Pay Run

This calculation method, sometimes called the alternative method, determines the director’s NI liability on a weekly/monthly basis in each pay run using weekly or monthly earnings thresholds. It is most common for directors who are paid regularly by the company. As this method yields an averaged NI liability in each pay run without reference to other pay runs, a balancing calculation is carried out at an appropriate time using Year to Date earnings thresholds. This makes any necessary correction to the director’s NI liability. Find out more about this calculation method.
Previous Tax Details: Starting Basis In the Previous Tax Details section you specify the available details about the employee’s previous tax and NI details in the current tax year.

Starting Basis: This is an existing employee

Select this option if you are setting up an employee who already works for you and is paid in the normal way. For example, if you are setting up Sage One Payroll for the first time, you’ll need to add your existing employees to the system.

When you select this option, a number of additional fields appear.

Starting Basis: Employee Declaration: P45

Select this option if the new employee has presented a P45 Part 3 issued by their previous employer.

Then choose one of the Circumstances options. These determine which additional options appear.

* Circumstance A

Select this declaration if this is the employee’s first job since the last 6 April, and they have not been receiving taxable Jobseeker’s Allowance, Employment and Support Allowance, taxable Incapacity Benefit, or a state or occupational pension.

* Circumstance B

Select this declaration if this is the new employee’s only job, but since last 6 April they have had another job, or has received taxable Jobseeker’s Allowance, Employment and Support Allowance, or taxable Incapacity Benefit. This option also declares that the employee does not receive a state or occupational pension.

* Circumstance C

Select this declaration if the new employee also currently has another job, or receives a state or occupational pension. If the new employee does not have a P45 from their previous employer, use the Employee Declaration: P46 starting basis instead.

Starting Basis: Employee Declaration: P46

You also need to choose one of the Circumstances options, which determines the employee’s tax code.

* Circumstance A

Select this declaration if this is the employee’s first job since the last 6 April, and they have not been receiving taxable Jobseeker’s Allowance, Employment and Support Allowance, taxable Incapacity Benefit, or a state or occupational pension.

* Circumstance B

Select this declaration if this is the new employee’s only job, but since last 6 April they have had another job, or has received taxable Jobseeker’s Allowance, Employment and Support Allowance, or taxable Incapacity Benefit. This option also declares that the employee does not receive a state or occupational pension.

* Circumstance C

Select this declaration if the new employee also currently has another job, or receives a state or occupational pension.

* Unknown

Choose this circumstance option when you don’t have enough information on the starter to complete a P46.

This automatically applies tax code 0T on a Week 1/Month 1 basis to the starter’s pay, which effectively sets a punitive rate of tax. This is intended to encourage them to contact HMRC on the Income Tax Helpline (0300 200 3300 / 0845 300 0627) so that the correct tax code can be issued.
NI Category The employee’s National Insurance category. You must specify this for any new employee.

The letter is usually A, B, C or J.


For employees under 16, you would normally assign letter A. Sage One Payroll recognises that the employee is not yet due to pay NI, so doesn’t deduct this from their pay until they turn 16. Further information about employing children.

Further information about NI categories.
Tax Code The tax code determines the tax allowances the employee receives. You must specify this if the employee already works for you or has presented a P45 Part 3.

The tax code should be specified on the P45 Part 3.

If the new employee does not present a P45, they must complete a P46, which will indicate to the payroll system which which tax code they should be on.

If the employee’s tax code subsequently needs to be changed to take into account the employee’s correct total pay to date and total tax to date values for the tax year, HMRC will inform you.
Leaving Date The date on which the employee finished their previous employment.
Week 1/Month 1 If the employee’s tax is calculated on a week 1 / month 1 basis, select this check box.
Final Pay Period The week or month of the employee’s final pay run in their previous employment.
Total Pay to date The total amount of pay the employee has received in the tax year to date, if any.

You can get this from the employee’s P45 Part 3.

If the employee is set to Week 1/Month 1 set this value to zero.
Total Tax to date The total amount of tax paid by the employee in the tax year to date, as specified on their P45.

If the employee is set to Week 1/Month 1 set this value to zero.

If the employee is not set to Week 1/Month 1, the payroll system automatically calculates the employee’s total tax liability for the tax year to date based on:

* The employee’s tax code
* The final pay period
* Total pay to date

The value it calculates normally should agree with the P45 Part 3.

If the values do not agree, the ‘Calculated P11 Tax’ field is displayed. This specifies the automatically calculated value.

The calculated value is added to the P11 and is used for subsequent tax calculations, rather than the value on the P45.
Employer’s PAYE Ref This reference number identifies the employee’s previous employer, if any. It appears on their P45.

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