Payroll

Payroll pays a team's employees from the hours and pay recorded in Magpie: it works out each pay run's hours, overtime and salaries, takes off what you withhold, and gives each employee a payslip. The tax and other amounts to withhold are yours to set, as your accountant or your tax authority gives them (see Tax and other amounts you withhold below).

Who can use it

Payroll is used in a team, not in Personal. It is open to the team's admins and to the people they name as payroll administrators in Settings, Payroll administrators. Other members of the team do not see it, even when they can use every other area, because Payroll shows everyone's pay. A guest can be named once they have been given Payroll as a whole, which suits an outside bookkeeper.

A payroll administrator can do everything a team admin can in Payroll except name payroll administrators.

Setting up

The first time you open Payroll, it asks two things:

• Currency: the currency employees are paid in. While your books are kept in Accounting, Payroll uses their currency.
• Tax year starts: the day year-to-date totals on payslips count from, such as 1 January or 6 April.

Set up Payroll adds the starting pay items. When your books are kept in Accounting, it also adds the accounts payroll will post to: Wages and salaries, Employer payroll costs, Wages payable and Payroll deductions owed.

Pay runs then opens with Get started: the steps to the first pay run, each with the button that does it, and Done on the ones already done. The amounts to withhold and your books in Accounting are choices, with Skip. Hide takes the band away for you; it goes for everyone once a pay run is approved.

Pay schedules

A pay schedule says how often a group of employees is paid. Add pay schedule asks for:

• a name, such as Hourly staff;
• how often: every week, every two weeks, twice a month or every month;
• the day the first pay period starts;
• the pay date: the last day of the pay period, or up to 30 days after it.

Each pay period follows on from the one before. Twice a month pays the 1st to the 15th and the 16th to the month's last day, so it starts on a 1st or a 16th. A monthly schedule pays from its first day's date to the day before that date next month; in a shorter month the date moves to the month's last day.

Pay runs shows the next pay period of each schedule and its pay date. In Settings, each schedule's name, how often it pays, its first day and its pay date change where they are shown. Once a pay run on a schedule is approved, how often it pays and its first day are fixed, because a change would move every period it paid; add another pay schedule instead. Archive pay schedule keeps it but starts no new pay runs on it; Restore puts it back.

Pay items

Pay items are the kinds of line a payslip has:

• an earning is paid to the employee. It is paid by the hour, times a multiplier such as 1.5 for overtime, or as an amount;
• a deduction is withheld from the employee's pay and owed to someone else, such as income tax or the employee's pension contribution;
• an employer contribution is paid by the team on top of gross pay, such as its share of a pension.

Payroll starts with Regular hours, Overtime, Salary, Bonus, Income tax withheld, Employee pension and Employer pension. Each can be renamed in Settings, Pay items. Regular hours, Overtime and Salary are always kept; any other item can be archived and restored.

Overtime

Payroll pays no overtime until a limit is set. In Settings, Overtime, set Weekly overtime to the hours in a week after which time is paid as overtime, Daily overtime to the hours in a day, or both. Week starts on sets the first day of each week that weekly overtime counts. When Staff Scheduling has its own overtime limits turned on, Payroll offers them as the starting values.

Other settings

• Time zone for hours: time worked counts on the date it starts in this time zone.
• Employer name and Employer address: printed at the top of every payslip.

Each setting is saved as soon as it changes. Payroll stores no national ID numbers, tax references or bank details.

Tax and other amounts you withhold

Payroll does not work out income tax, social insurance or pension amounts for you yet, and it does not file returns or pay the tax authority. Those rules depend on the country, the region and each employee's own tax details, and your accountant or your tax authority's calculator gives the right figure.

Enter each figure once, as a standing line on the employee's page: a percentage of gross pay, such as 20% income tax, or a fixed amount each pay run. Every pay run then takes it off, shows it on the payslip and in the books, and adds it to the year to date. When a figure changes, such as at the start of a tax year, add the new one from that date. Summary totals what was withheld in a month, a quarter or a tax year, ready to pay and report.

If something in Payroll does not work as described, Contact support.