Dayforce calculates employee PAYE and NI contributions with the most recent notifications received from HMRC for the pay period:
- For NI contributions, Dayforce uses the NI letter effective on the pay date, or on the pay period end date if no NI letter is effective on the pay date. For general information about National Insurance, including classes, categories, thresholds, and rates, see https://www.gov.uk/national-insurance.
- For Income Tax, Dayforce uses the values in the Tax Code and Tax Basis fields of Payroll > Tax Definitions in People that were effective on the pay date or on the pay period end date, whichever is the greater. For general information about PAYE tax, see https://www.gov.uk/income-tax-rates.
For information about where to view and manage NI and Income Tax for UK employees in DayforceUK Payroll Taxation.
Tax codes and NI information show in UK employee payslips.
Payments After Leaving and Tax Calculations
Dayforce considers regional tax requirements for Scotland or Wales for payments made to an employee who left the UK after the P45 was issued and the 0T tax code was used. When an employee leaves the UK and has a tax code with a tax prefix of either S or C, Dayforce does the following:
- Applies the correct 0T tax calculations for payments.
- Shows the tax code for terminated employees with a Scottish or Welsh tax prefix on pay slips.