We are grateful to one of our EasyPay users who has quickly pointed out that there has been a recent change that affects some of the advice in our last newsletter.
The change is regarding employees classified as “COVID-19 Inactive” this month. If you are a company making a BEAT application and have any employees that are affected, please read this newsletter for information regarding changes made to EasyPay V19.32.
This change has arisen from a measure in the new regulations that were announced Friday. A link to the full text of the regulations is here We have also just been informed that the BEAT Guidance notes have been updated today to reflect this change. A link to these notes is here.
COVID-19 Inactive Employees
If you have employees who are classified as “COVID-19 Inactive”, these employees will receive an amount, passed through the Employer, from the Gibraltar Government.
If these employees are receiving only this amount, then there is no need to produce a payslip for April.
If you have EasyPay Standard, in order to avoid producing a payslip by accident, it is advisable to change the employee to inactive before running payroll.
If you have EasyPay Professional, in order to avoid producing a payslip by accident, you can change the employee contract to “Suspended” before running payroll.
Alternatively a payslip with zero income could be produced for April. However it is important to point out that the Government payment should not be included on a payslip. This is because the amount paid by the Government is exempt from Tax. It must not be included in the P8 at the end of the year. Note: These employees should not pay SI for this month.
Important Part: Topping Up The COVID-19 Payment
The new legislation includes a provision for employers to optionally provide an additional payment to top up the amount up to the value of their normal salary.
If an employer provides an additional payment, tax must be calculated on this amount and the payment must be included on the P8.
This is detailed in the legislation at paragraph 8 (4) and paragraph 19 (8). As per the BEAT guidance notes, the tax should be calculated at the rate of 20%.
We have therefore updated EasyPay today so that this is easier with EasyPay Professional. You will need to update to V19.32.
After updating, you will first want to add a new income type for the top up payment. You could call it “COVID-19 Top Up” for example.
For affected employees, change their contract status to “COVID-19 Inactive”. EasyPay will then produce payslips for these employees however their salary and social insurance on the payslip will default to zero.
You will need to manually add a new transaction to the payslip for the top up payment. Then click the box at the end of the line to go into the extended properties of the transaction. This is where you can specify that tax will be specified manually. Specify the amount of tax. You will need to manually work out the tax at 20% and type it in.
We hope this change and additional information helps. The situation at the moment is fairly fluid and new measures are being announced every few days. We are grateful for your feedback and as always will endeavour to make changes to the system to help ASAP.