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UK PAYE and NIC Overview and Set-Up Steps (Doc ID 742393.1)

Last updated on DECEMBER 09, 2022

Applies to:

Oracle HRMS (UK) - Version and later
Information in this document applies to any platform.


This document is intended to give a basic understanding of PAYE and NIC for UK Payroll set-up, giving Legislative background and up to date rates and thresholds along with Oracle set-up steps.



This document will help set up of UK PAYE and NIC

It its targeted at End Users of the Application, within the HRMS teams.



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In this Document
 PAYE (Tax)
 UK Tax Year Calendar
 Week 53 Payments
 Employers' responsibility for PAYE
 What payments does PAYE apply to?
 Tax codes - the basics
 What is a tax code?
 Common tax code letters and what they mean
 Other tax codes
 Tax Basis
 PAYE Bands
 Example of a Simple Manual Calculation of PAYE (Tax) – 20% band
 Example of a Manual Calculation of PAYE (Tax) – 40% band
 PAYE forms and deadlines
 Start of tax year forms
 Payroll administration forms
 PAYE Online filing - options and deadlines
 National Insurance Contributions (NIC’s)
 National Insurance Number
 Class 1 National Insurance contributions
 Earnings limits
 Lower Earnings Limit (LEL)
 Earnings Threshold (ET)
 Upper Earnings Limit (UEL)
 Contracted In / Contracted Out
 National Insurance contribution letters
 How to work out NICs
 Gross Pay
 Contribution category letter
 Methods of working out NICs
 Class 1 NIC
 Using the National Insurance contributions Tables
 Exact percentage method
 To work out the employee’s contribution
 To work out the employer’s contribution
 Contracted-out occupational pension schemes
 Employee’s NIC rebate
 Employer’s NIC rebate
 Directors National Insurance
 Oracle System Set Up Requirements
 Business Group Settings/ System requirements
 Person level settings
Multiple Assignment and Aggregated PAYE settings

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