Methodology used in BrightPay

Where you see a difference in statutory pay amounts or National Insurance contributions being calculated by BrightPay, when compared to your previous software, the following is to be noted:

Statutory Pay Calculations

BrightPay uses the full statutory week method when calculating & applying statutory pay calculations.

Weekly Payroll Example:

An employee's Maternity Leave begins on a Wednesday. Therefore the last day of her SMP week will be a Tuesday.

SMP will thus begin in the weekly pay period in which the first Tuesday of the maternity leave falls.

Monthly Payroll Example:

An employee's Maternity Leave begins on a Wednesday. Therefore the last day of her SMP week will be a Tuesday.

SMP will thus begin in the pay period in which the first Tuesday of the maternity leave falls.

BrightPay will then establish how many Tuesdays fall in the monthly pay period and apply the weekly SMP rate to the number of Tuesdays there are.

Therefore, if your previous payroll software used the pro-rata method when calculating and applying statutory pay calculations, you may see a difference in this instance.

National Insurance Calculations

BrightPay uses the Exact Percentage Method in its calculation of NIC.

There are two ways in which National Insurance contributions can be calculated. Both methods are acceptable by HMRC:

Exact Percentage Method:

The exact percentage method uses the Employee’s gross pay, pounds and pence, when making the National Insurance calculation. Most commercial payroll software uses the Exact Percentage Method as the means for calculating National Insurance contributions.

Table Method:

The table method uses the National Insurance Contribution tables issued by HMRC. The NICs due are worked out using whole pounds only. This often means that employees may pay slightly more or less than if the exact percentage method were used.

Therefore, if your previous payroll software used the Table Method when calculating National Insurance, you may see a difference in this instance.

Need help? Support is available at 0345 9390019 or [email protected].

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