How do I add redundancy pay as a pay type so it doesn't deduct tax and NI?

If you are using QuickBooks Online (QBO) Payroll Core, adding a redundancy payment as a pay type is not directly supported. However, Jmiddleton, this option is available with QBO Payroll Advanced. Let me provide an alternative solution for QBO Payroll Core and discuss this further.

If you are using QBO Payroll Core, we have an alternative way to add redundancy pay as a pay type, by creating a reimbursement pay type that will be tax and NI-free.

Here's how:

1. On the left panel, go to Payroll.
2. Click on Employees, then select an employee.
3. Scroll down a bit, and in Pay Types click on Edit.
4. Click on + Another Reimbursement type, then rename.
5. Hit on Save.
   
   

However, if you are using QBO Payroll Advanced, then you can follow the steps below to add a redundancy payment as a pay type.

Here's how:

1. Click the Gear icon in the upper-right corner.
2. Select Payroll settings.
3. Go to the Pay Categories tab under Pay Run Settings.
4. Press Add in the upper-right corner.
5. Enter the name and select Save. 
6. Put a checkmark on the box beside PAYE exempt and National Insurance.
7. Make the necessary changes.
8. Hit Save.
   
   

Once done, you can proceed with entering the payment. You can include the category through the earnings section of the pay run.

Also, different QuickBooks Payroll products offer varying features and capabilities. Choosing the product that best aligns with your specific business requirements ensures that you have the necessary tools to manage payroll tasks.

Moreover, refer to this article for running payroll reports, as it will help streamline your payroll operations by establishing a routine review schedule. This will improve efficiency and reduce errors: Run Payroll Reports.

If you have any questions or need further assistance with your QBO Payroll settings, feel free to reach out. I'm always here to help.