Set up Payroll
Before the first run you need one payroll group and the component versions you will use. Both are permanent once saved: to change one, create a new one.
Payroll groups
Where: Payroll → Payroll groups → Create payroll group.
Who: payroll.setup.manage, and assignment to the employer business unit.
A group is a set of employees paid together. Everyone in it shares one employer, currency and pay frequency.
- Select Create payroll group.
- Fill in the fields:
| Field | Rule | Example |
|---|---|---|
| Code | Letters, numbers, - and _; unique; stored in capitals | MONTHLY-LDN |
| Name | Up to 150 characters | Monthly London |
| Employer business unit | The legal employer | Bright Haven – Head Office |
| Country (ISO two-letter) | A real country code | GB |
| Currency (ISO three-letter) | A real currency; decides decimal places | GBP |
| Pay frequency | Weekly, Fortnightly, Four weekly, Semimonthly, Monthly | Monthly |
| Calendar reference | Your own label for the pay calendar | GB-MONTHLY |
| Jurisdiction reference | Your own label; no tax rules are applied | GB-MANUAL |
| External reference | Optional link to another system | SAGE-GRP-01 |
- Save. The group appears in the list with Code, Name, Employer, Currency, Frequency, Country, Jurisdiction and Calendar.
Rules that matter later:
- An employee can only be captured into a run if their pay agreement has the same currency and pay frequency as the group, and their employment is with the same employer.
- The currency sets the rounding: GBP 2 decimals, JPY none, BHD 3.
Refused: "Payroll group code already exists"; "Country must be an ISO country code"; "Unsupported ISO currency".
Component versions
Where: Payroll → Component versions → Create component version.
Who: payroll.setup.manage.
A component is a type of amount added to an employee's pay: an earning, a deduction or an employer contribution. Each has a rule version and dates, so you can change a definition without altering past runs.
- Select Create component version.
- Fill in the fields:
| Field | Rule | Example |
|---|---|---|
| Code (BASE is reserved) | Letters, numbers, -, _; BASE not allowed | OVERTIME |
| Name | Shown on employee statements | Overtime |
| Kind | Earning, Deduction or Employer contribution | Earning |
| Tax treatment (description only) | Taxable, Non taxable, Pre tax, Post tax, Not applicable. A label only. | Taxable |
| Effective from | First date it may be used | 2024-01-01 |
| Effective to | Optional last date | (empty) |
| Rule version | Your version label; unique with the code | V1 |
| Description | Notes for administrators | Hours approved by line manager |
- Save.
| Kind | Effect on pay |
|---|---|
| Earning | Added to gross pay |
| Deduction | Taken from gross to give net pay. Enter it as a positive amount. |
| Employer contribution | Added to the employer's cost; does not change the employee's net pay |
Example set-up at Bright Haven:
| Code | Name | Kind | Tax treatment | From | Rule version |
|---|---|---|---|---|---|
OVERTIME | Overtime | Earning | Taxable | 2024-01-01 | V1 |
PENSION | Employee pension | Deduction | Pre tax | 2026-04-01 | 2026-1 |
ER_PENSION | Employer pension | Employer contribution | Not applicable | 2024-01-01 | V1 |
Change a component
You can't edit a component. Create a new version with the same code and a new rule version:
PENSION 2025-1 from 2025-04-01 to 2026-03-31
PENSION 2026-1 from 2026-04-01 (new)
When adding a line, choose the version whose dates cover the employee's whole service period. Past runs keep the version they used.
Refused: "BASE is reserved for agreed compensation"; "Invalid component dates"; "Component rule version already exists".
Next: Create a pay run.