With 1st of January falling on a Wednesday, if you are calculating fortnightly payroll periods, you may decide to adjust the last payroll of the year to pay up to 31st December. In such cases Indigo provides the functionality to adjust the number of extra days paid and Social Security Contributions (SSC) as required.
CASE 1: Creating a Fortnightly Payroll starting 16th December
To close off the year you may decide to pay the extra 2 days up to 31st December in the last payroll. To do this you must enter 2 extra days in the Extra days field of the payroll setup. This would mean that for this payroll employees would be paid for 96 basic hours instead of the usual 80.
Apart from adjusting basic hours, there is an extra Monday to consider so there is an additional SSC contribution to be added in this payroll so as to reconcile the number of SSCs added during the year with the actual number of Mondays, which in 2019 is 52, so make sure not to exceed this. Another reason for this is that the SSC must be deducted at the current year's rate because in the following year the SSC rates will change due to the cost of living adjustment. To deduct an extra SSC contribution you must change the value in the SSC Contribution field in the payroll setup screen to 3.
If you also want to deduct the extra two days in the first payroll of 2020, similar adjustments must be done with a negative amount.
CASE 2: Creating a Fortnightly Payroll starting 23rd December
In this case you may decide to pay for just 1 week and 2 days to close off the year.
To do this you must enter -5 in the Extra days field of the payroll setup record to deduct the first 5 days of January. This would mean that for this payroll employees would be paid for 56 basic hours instead of the usual 80.
2 SSC contribution must be deducted from this payroll.
If you also want to pay the extra 5 days in the first payroll of 2020, similar adjustments must be done.
Points to note:
- If your payroll spans across the beginning of 2020 you must be careful to apply the weekly cost of living increase effective 01/01/2020 before calculating so that dates in 2020 are paid at the new rate.