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Sage 50cloud Payroll - Process casual workers, employees paid infrequently and using On Hold

Under Real Time Information (RTI), you can't use the P38A and P38(S) procedure. This means that you must add all employees, including casual and infrequent workers, to your payroll and submit them to HMRC.

Unless you notify HMRC that an employee is still employed by you, if you don't include an employee on a full payment submission (FPS) for three months, HMRC close the record they hold for that person. This can also happen if you process the employee with zero pay for three months. To avoid this, if you have employees who aren't paid every week or month, you must use the On Hold status within their employee record. This tells HMRC that the person still works for you, but isn't being paid for a particular pay period.

If prefer to process the employee with zero pay, rather than put them on hold, you should check if the employee has an attachment of earnings. If so, processing with zero pay carries forward the deduction rate for certain attachments as the employee didn't earn enough for that period. To ensure this doesn't happen, you should put the employee on hold.

Find out more about how to add new employees and students >>

What happens when you put an employee on hold

When you set an employee's status to On Hold, this makes sure that you can't update the employee by mistake. If you select the employee and try to update them, a message appears to indicate that the employee can't be updated.

When you submit your FPS, the FPS Employee Selection window appears and you can choose whether to include an employee in the submission. The employee selection window shows all employees that are on hold, not just employees in this pay run. You should only include the employee in the FPS if you're submitting the FPS for the pay run in which they'd normally have been paid.

An employee who is on hold is only included in an FPS as on hold for the first pay period. For any subsequent pay periods they're on hold, they don't appear on the FPS. As you've notified HMRC that they're on hold, they won't close the record they have for that person. When the employee is taken off hold and is next paid, they're included on the following FPS.

What happens when you take an employee off hold

When you need to pay the employee again, you should set their status back to OK. When you process the employee again after they've been on hold, a message appears:

'Some of your employee records have not been updated for a previous pay period. If you miss a pay period update, your employees' tax may not be calculated correctly.'

If the message appears for an employee who has been on hold, to continue, click OK. The employees' tax will be correct as the pay period was missed because the employee wasn't paid. If the employee hasn't been on hold, and shouldn't have missed a pay period, then you should check to make sure that all relevant periods have been processed.

If an employee is on hold at the end of a tax year, when you take them off hold and pay them for the first time in the new tax year, a message appears:

'Some of your selected employees have not been updated for the last period in the 2016/2017 tax year. Processing and updating them in the 2017/2018 tax year will make some of the previous year's YTDs read only.'
To continue click OK.

Change an employee's status to On Hold

  1. Double-click the required employee.
  2. Click the Employment tab.
  3. In the Status drop-down list, click On Hold.
  4. Click Save then click Close.

Change multiple employees' status to On Hold

  1. On the Employee List, click the required employees.
  2. Click Tasks then click Global Changes.
  3. Click Assign Employee(s) a new then click Status.
  4. In the Select a new employee status drop-down list, click On Hold.
  5. Click OK then click Yes then click OK.