In this forum we will discuss the significance of the next pay number in Link Payroll Application and when does manual alteration of this becomes mandatory. The next pay number is maintained at menu 312-2 Pay Teams and is separate for each pay team. The next pay number is used to determine the remaining number of pays during each pay run which is directly linked to the calculation of Pay As You Earn Tax (PAYE). The users of Link Payroll must always ensure that their pay teams next pay number reflects the actual pay number for accurate PAYE calculation.

Below are some scenarios where it becomes mandatory for users to alter the next pay number of their respective pay teams manually:

1. When special pay is created using the standard pay team. Example: A company pays its employees fortnightly. Payroll personnel uses pay team ‘FTN' for the creation of the pay. After pay number 8, company decides to payout bonus. This bonus is paid on a non pay week before the actual pay 9. The payroll personnel creates a special pay using the ‘FTN’ pay team and updates this pay. System will tag this special pay as 9 since this was the next number. Now after updating this pay, the payroll personnel will have to change the next pay number for pay team ‘FTN’ back to 9 in order for accurate PAYE calculation. If this is not performed system will take the next pay number as 10, and calculate inaccurate remaining number of pays and as a direct result, inaccurate PAYE.
2. When a manual pay is created for an employee who has resigned from the company and the payroll personnel uses the standard pay team to create this pay. Example: A company pays its staff monthly using pay team ‘MTH’. Employee X is leaving the company after pay number 10. The payroll personnel creates this employee's pay before the normal pay week to settle the dues using the pay team ‘MTH’. Now after updating this pay, the pay number for pay team ‘MTH’ would have changed to 11, therefore before the payroll personnel creates the next set of normal pay, the next pay number would need be changed to 11 again for pay team ‘MTH’ for accurate PAYE calculation. If this is not performed system will calculate inaccurate remaining number of pays and as a direct result, inaccurate PAYE.
3. When a manual pay is created for employees using a different pay team, it is again highly recommended that the next pay number of the new pay team is set to be the same as the next pay number of your standard pay team, so that system is able to calculate your remaining number of pays accurately for PAYE calculation. Example: A company pays its staff Bi-monthly using pay team ‘BI-MTH’. Now after the 12th pay, company decides to pay certain employees bonus for achieving their sales target. The Pay clerk changes the pay team for these selective employees from ‘BI-MTH’ to ‘MBI-MTH’. The Pay clerk will also need to change the next pay number of pay team ‘MBI-MTH’ to 13 (Same as BI-MTH next pay number) so that systems calculates accurate remaining number of pays and deducts accurate PAYE on this bonus payout.

Figure 1: Pay Teams showing Next Pay Number