How to Change Pay Frequency in Sage 50 Payroll

Sage 50 cloud Payroll lets you ease change pay frequency of an employee during the tax year. Even though users can change the pay frequency several times around the tax year, modifying it at the start of a new tax year is the easiest and best time. This is the time before you begin to process payments. It would not be possible to move from or to a 2-weekly or a 4-weekly pay cycle till the beginning of the new tax year.

However, if you need to change the pay cycle during a tax year, then make sure you can only modify the pay frequency between a weekly & a monthly calendar. Let us find out how the Sage 50 payroll changes pay frequency, just like the Sage 50 Bonus Account Setup.

Requirements For Changing Pay Frequency in Sage 50 Payroll

Things to Consider Before Pay Frequency Change in Sage 50 Payroll:

• Consider pension contributions and sending that info to their provider.
• You need to make sure that pension contributions are calculated correctly for the new pay frequency.
• You will need to send the updated pension contribution information to the employee’s pension provider.
• Change the pay frequency at the beginning of a new tax year.
• This is the easiest time to make the change, as it will minimize the need to make adjustments to tax and national insurance calculations.
• Make the change before you start processing payroll.
• If you make the change after you have started processing payroll, you will need to follow specific rules to ensure that tax and national insurance continue to calculate properly.
• Post all outstanding transactions into accounts via the nominal link.
• This will ensure that all outstanding transactions are processed correctly under the new pay frequency.

Here are some additional tips for changing an employee’s pay frequency:

• Communicate the change to the employee in advance.
• This will give the employee time to adjust their budget and expectations.
• Make sure the employee’s payslip reflects the new pay frequency.
• This will help to avoid any confusion or errors.
• Review the employee’s contract to make sure the change is compliant.
• Some contracts may specify a minimum pay frequency, so you will need to check with the employee’s contract before making any changes.

Moreover Sage 50 Payroll Formulas Can be applied for calculating federal or state, either you are going to change employee salary payment frequencies.

Check and Adjust Sage 50 Pay Periods Overlapping

Steps to Perform if There Are Overlapping Pay Periods in Sage 50:

If the new pay period failed to update due to its overlapping pay periods with the existing updated period, then here options are available:

1. Wait Till the New Tax Year:

The best time to change pay frequency is at the start of the new tax year. This is because the new tax year will have a clean slate, with no overlapping tax periods to consider. This will make the changeover process much easier and less likely to cause errors.

Here are some of the benefits of changing pay frequency at the start of the new tax year:

• There will be no overlapping tax periods to consider.
• You will have more time to communicate the change to employees and make sure that all outstanding transactions are posted.
• You will be able to start the new tax year with the new pay frequency in place, which will help to ensure that everything is processed correctly.

2. Proceed to Process at the Old Pay Frequency:

If you are looking to lengthen the pay period, it may be easier to continue processing at the old frequency until the next available processing date for the new frequency. This is because if you change the pay frequency mid-cycle, you will need to prorate the employee’s earnings and taxes for the remaining days of the pay period. This can be a complex and time-consuming process, so it is best to avoid it if possible.

Continuing to process at the old pay frequency may seem like a simple solution, but it is important to consider the following factors:

• You will need to make sure that the employee’s earnings and taxes are calculated correctly for the new pay frequency.
• You will need to communicate the change to employees and make sure that they are aware of the new pay dates.
• You may need to update your payroll software to reflect the new pay frequency.

If you are not comfortable continuing to process at the old pay frequency, you can also choose to change the pay frequency at the beginning of a new tax year. This will avoid overlapping pay periods, but it will also require you to prorate the employee’s earnings and taxes for the remaining months of the year.

The convenient way to pay period lengthening is to begin processing at the existing frequency till the upcoming processing data for the updated frequency is available

Note: When you reprocess payroll using the new pay frequency, there is a high chance that the amount of tax and National Insurance (NI) will be different from the initial processing. This discrepancy arises because the new pay frequency applies different thresholds for calculating taxes and NI contributions. As a result, employees may experience different deductions and net pay amounts than their previous pay frequency.

3. Rollback and Reprocess:

• Roll back the payroll to remove any periods that have been updated into the new pay period. This will ensure that the employee is only paid for the correct number of days.
• Reprocess the original gross payment, plus the gross pay for the period that cannot be updated, at the longer pay frequency. This will ensure that the employee is paid the correct amount in total.
• Assign a post-tax and NI deduction to the new payslip. This deduction will represent the amount of tax and NI that has already been paid to the employee.
• Deduct the net amount that has already been paid to the employee from the new payslip. This will ensure that the employee is only paid the amount that they are owed.
• Provide the employee with a replacement payslip. The replacement payslip should reflect the correct amount of pay and deductions.
• Update your records to reflect the change in pay frequency. This includes updating the employee’s tax code and NI contributions.
• Submit a full payment submission (FPS) adjustment. This will ensure that the correct amount of tax and NI is paid to HMRC.

Also Sage 50 Payroll FPS Adjustment and Sage 50 Payroll Attachments Of Earning are explained by the team of AccountsPro step by step.

Change Employee’s Pay Frequency in Sage 50 Payroll for one Specific Employee/an Individual Employee?

• Double-click the employee’s name in the payroll system.
  • Make sure you are logged in as an authorized user with permission to change employee pay frequency.
  • If you are not sure who is authorized to make this change, check with your payroll administrator.
• Click the Employment tab.
  • This is where you will find the Payment Frequency drop-down list.
• From the Payment Frequency drop-down list, select the desired pay frequency.
  • Be sure to select the correct pay frequency for the employee’s job title and position.
  • If you are not sure which pay frequency to select, consult with your payroll administrator.
• Click Yes to confirm the change.
  • This will prompt you to save the changes to the employee’s record.
• Click Save to save the changes.
  • This will make the change to the employee’s pay frequency effective immediately.
• Click Close to close the employee’s record.
  • This will return you to the main payroll screen.

Additional tips:

• If you are changing the pay frequency for multiple employees, you can select multiple employees before clicking the Employment tab.
• If you are changing the pay frequency for an employee who is currently on leave, you will need to change the pay frequency for the employee’s leave record as well.
• If you are changing the pay frequency for an employee who is already paid for the current pay period, you will need to reprocess the employee’s pay to reflect the new pay frequency.

Change the Sage 50 Payroll Pay Frequency for Multiple Employees

To quickly change the pay frequency for a group of employees, use Global Changes:

• On the Employee List, select the required employees.
  • Ensure you are logged in as an authorized user with permission to change employee pay frequency.
  • In case you are not sure who is authorized to make this change, check with your payroll administrator.
• Click Tasks, then Global Changes.
  • This will open the Global Changes dialog box.
• Click Assign Employee(s) a new one, then Pay Period.
  • This will display a list of pay frequencies.
• From the Select, a new employee pay period drop-down list, select the required pay frequency.
  • Be sure to select the correct pay frequency for the group of employees.
  • If you are not sure which pay frequency to select, consult with your payroll administrator.
• Click OK.
  • This will prompt you to confirm the change.
• Click Yes to confirm the change.
  • This will make the change to the group of employees’ pay frequency effective immediately.
• Click OK to close the Global Changes dialog box.
  • This will return you to the main payroll screen.

Additional tips:

• You can use Global Changes to change other employee information as well, such as tax code, NI contributions, and leave status.
• If you are changing the pay frequency for a large group of employees, it may be helpful to export the employee list to a spreadsheet before making the changes. This will allow you to review the list and make sure that you have selected the correct employees.
• In case you are making changes to the pay frequency for employees who are already paid for the current pay period, you will need to reprocess the employees’ pay to reflect the new pay frequency.
• If you are changing the pay frequency for an employee who is currently on leave, you will need to change the pay frequency for the employee’s leave record as well.

Conclusion!

Hopefully, the article helped you to know the right time to change pay frequency, and now you can confidently process the steps to change the pay frequency of an employee. In case you face any difficulty then speak to the professional team. Simply use a Sage 50 Live Chat, phone number, or email address to get the best resolution.

Frequently Asked Questions