I use QBpayroll for 4 employees. I now need to enter a payroll item with no NI or PAYE, how do I do it?

Thanks for posting here with your concern, Material Things. I'll share some details and steps in creating redundancy payments with QuickBooks Online (QBO).

Beforehand, may I know what QBO Payroll you're currently using when creating these payrolls? Have you received any notices from HMRC? Any additional information is much appreciated, as this will help me check and provide further information to resolve your concern.

To help you create redundancy payments, we can create another pay category to exclude taxes you don't want to calculate in the pay run. Here's how:

1. Go to the  Gear icon from the upper-right corner and select Payroll settings.
2. Select the Pay Categories tab under Pay Run Settings.
3. Click Add in the upper-right corner and enter the name 
4. Tap Save.
5. Put a checkmark on the box beside PAYE exempt. 
6. Make the necessary changes and click Save.

However, to exclude NI contributions, I'd suggest contacting HMRC to guide you with more detailed information as to what category is eligible for the specific employee.

Moreover, you can visit these links to guide you in managing and organising your payroll:

• Standard Payroll Hub | QuickBooks Online.
• Advanced Payroll Hub | QuickBooks Online.

You can always reply in the comments below if you have any additional questions about redundancy payments. We'd be glad to have you back in this forum. Take care and have a good one!

I have standard payroll and there seems to be no way to set up a redundancy payment. The above instructions don't match what I see on screen

Help please!

Hi jime, thanks for joining this thread.

To record the redundancy pay in QuickBooks Online Standard Payroll, you will have to use the reimbursement additional pay category and re-name it Redundancy. This particular category is not subject to NI or PAYE tax. To create the category, go to the employee and select Actions > Additional pay > Select the plus (+) icon > Select Add next to Reimbursement. Enter Redundancy in the Name field and enter a default amount. You can edit this amount when you come to run the payroll. Save your changes, then close the window.

The new reimbursement pay type is now added to the employee record. The pay type is also added to the company settings, so that you can use it for other employees. To include or exclude this reimbursement pay type in your employee’s pay, select the slider to turn it on or off in the employee record.