Here's how to add a new employee to your FreeAgent payroll, enter payroll information and run a simple gross-to-net payroll for that person.
Where do I start?
To add a new employee to your FreeAgent payroll, you must first set them up as a user of the software.
To do this, click Settings at the top right of the screen, then click Users.
If you don't see this option then you don't have access to set up new users and you would need to contact your accountant or whoever looks after your accounts in your office.
Click the New User button.
You can then enter all the details for your employee, including whether he or she is a director or not. If you choose this setting here, FreeAgent will, by default, use the Director option when working out National Insurance on the payroll.
Restricting this employee's access to the software
When it comes to access details, if this employee will not need to log in to FreeAgent at all - that is, he or she won't be recording time or anything else on the software - then set the access level to No Access. You can still run a payroll for an employee who does not have access to the software.
You do, though, still need to set a password for the employee, in case you ever change this setting in the future so that he or she can access FreeAgent.
Opening mileage
If, at the FreeAgent start date, the employee had travelled a number of miles in his or her own car since the beginning of the tax year, put the number of miles in here.
This is because FreeAgent works out the mileage for each employee using HM Revenue approved mileage payments and will switch over to 25p a mile once the employee has travelled over 10,000 miles in the tax year.
Once the new user is set up, click Create New User.
OK, the employee is set up. Now I need to create the payroll.
Go to Payroll from the My Money drop-down.
Choose the new user from the drop-down menu, making sure you have the right employee and tax year.
Click the Set Up Payroll button.
Enter the employee's details, including tax code, start date, and whether or not this person is a director for payroll (National Insurance) purposes. Please note, FreeAgent will set the National Insurance as Director or Employee here by default, depending on how you have set up the user, but you can edit that at the payslip level, see below.
Click Create Payroll.
My employee joined part way through the tax year. Where do I put his/her previous employment details?
Click Edit Self Assessment Details for that employee.
Then fill in the Employment History information here. It's important to put in the previous employer's name as well as the income and tax in this employment.
Viewing a payslip
Clicking on a month's line on the payroll screen...
...brings up the payslip for that month.
You can edit the month's information, save the payslip for printing as a .pdf, or even delete the payslip, by clicking one of the buttons at the top right of the payslip.
Editing a payslip
Clicking Edit at the top right of the payslip brings up a window that lets you make the following changes.
You can add additional payments such as overtime or statutory payments.
You can include employee's and employer's pension contributions. For more about pension contributions please click here.
And you can opt to manually edit the PAYE and NI that FreeAgent calculates, or change the NI calculation basis from employee to director or vice versa.
Once you've finished editing the payslip, save your changes.
That's the end of this article. You've seen how to add a new employee to a payroll in FreeAgent and how to run a payroll for that employee.