ICB Level 2 Certificate in Payroll Administration

Demonstrate knowledge and understanding of the theory of payroll

• Understand the obligations of the payroll service to the employer, the employee, HMRC and other 3rd parties who are provided with data
• Demonstrate a basic understanding of the legislation relating to payroll, discrimination, employment status, data protection and confidentiality
• Understand and explain the legislation for PAYE and National Insurance Contributions (NICs)
• Understand and explain the requirements of the Working Time Directive in relation to payroll
• Demonstrate an understanding of the National Minimum/Living Wage
• Demonstrate an awareness of the legislation concerning the provision of a workplace pension scheme Explain the requirements of providing a payslip, to whom, when and the required details within it
• Demonstrate understanding of the schedule of submissions to HMRC under the “Real Time Information” (RTI) scheme
• Understand what information must be submitted to HMRC and the relevant deadlines that apply

Demonstrate knowledge and understanding of, and be able to calculate, the various payments that can make up an employee’s gross pay

• Calculate the correct gross pay for each pay period for employees who are paid an annual salary, weekly wage, hourly pay, overtime and bonuses
• Demonstrate an awareness of the different types of calculation that can be used for part-period payments for starters/leavers

Show knowledge and understanding of and be able to calculate, through the use of tables, the amount of National Insurance Contributions that will be deducted from gross pay.

• Understand and explain the difference between the various NI tables that can be used when calculating National Insurance Contributions
• Be able to identify NIable pay for a period using a gross pay figure
• Use appropriate tables/calculators to determine the NI Contributions due for a pay period

Show knowledge and understanding of the concept of PAYE, together with the use of tax codes, to correctly calculate the amount of PAYE to be deducted in a given period.

• Understand how tax codes (excluding K Codes) are calculated
• Understand the implication and application of Tax codes
• Given a tax code to be applied, be able to calculate the amount of any pay adjustment that an employee may receive in any given period
• Determine the amount of pay that is taxable for an employee with a given tax code
• Determine the correct amount of PAYE to be deducted for a given period
• Understand how to deal with notifications of change in tax code issued by HMRC (Forms P6 and P9)

Demonstrate knowledge and understanding of the requirements and trigger points for Auto Enrolment pensions.

• Demonstrate an understanding of the legislation and the requirements of Auto Enrolment (workplace) pensions
• Understand the trigger points for automatic enrolment into the scheme and the value of the contributions required
• Demonstrate an awareness of the different rules around opting out of a scheme

Understand the use of various forms that are used within a payroll system.

• Understand when and how to apply a P45 for a starter
• Demonstrate an understanding of how a starter checklist form is completed and used
• Demonstrate an awareness of all other relevant payroll forms

Understand and be able to complete the various forms that apply to a business running a payroll system.

• Understanding the details required to begin processing a payroll for a company, including appropriate company and existing employee details
• Demonstrate the knowledge for the details required to process payment for a new starter
• Complete basic gross to net calculations for employees on both a weekly and monthly basis using a variety of tax codes and NI categories (excluding K Codes)
• Produce reports detailing gross pay, deductions and net pay for each period – this can be done via a spreadsheet or other suitable electronic method
• Identify the details required in order to process pay for a new starter
• Demonstrate an understanding of the requirements and impact of RTI returns