QBO Standard Payroll Online How do I get QBO to accept change of NIC from Cat A to Cat C as one employee reached State Pension Age on 6 May

Welcome to the Community forum, electrohm.

I'm happy to guide you in updating your employee's information from Cat A to Cat C into your QuickBooks Online (QBO) account.

Here's how:

1. In the left menu, click Employees and go to the Employees tab.
2. Locate the employee name and click on it.
3. Go to the Tax information section, then hit the pencil icon. 
4. Under the NI letter* section, click the drop-down arrow and choose C - Pensioners (Employees over State Pension Age).
5. Hit Save.

To know more about how to make changes to an employee's information, check this article: Edit employees in QuickBooks Online Standard Payroll (UK).

If you need anything else about this matter, leave a comment below. I’m always ready to help. Take care!

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**Mark the post that answers your question by clicking on "Accept as solution".

Yes I already did that but qbo still excludes that employee from payroll And 

tells me to update employee record but nothing to update 

online chat with QBO today advised I upgrade from standard payroll! 
Qbo payroll is not up to the job if it cannot handle a life event

Thanks for the clarification, @electrohm.

You'll want to exclude the employee first from the payroll before you can make the changes. This way, you'll be able to update the employee's profile.

Once done, update your employees information again. You can refer to the steps provided by my colleague MirriamM above.

Additionally, do check our Employees and Payroll page for reference. There, you can read some of our great articles that can guide you in managing your payroll effectively.

Please let me know if there's anything else you need help with. I'm just a post away from you. Take care and stay safe.

I have found this not to be possible and this has been confirmed by Quickbooks.  It is apparently only possible at the start of the Tax year. In the meantime one of our employees is paying hundreds of pounds NI that they should not be paying.....      If they get enough complaints it might get fixed I was informed.....

That is what I found and nothing can be done until it is sorted by the Quickbooks Development Team.

Does not work. Confirmed by Quickbooks, requires an update by the Development Team.... 

WOW... this is now over a year later and this is still a problem... so I now have an employee paying hundreds of pounds per month that he does not owe and I have no way to resolve this.  And no idea how to manage it as a workaround... and no idea what to say to him.

Will this get refunded by HMRC automatically?

Will he lose the money?

How can I defend our company from accusations that we are using a non-compliant payroll?

Hello ibatey, there is no way to do this not unless you do it at the start of the tax year. We have passed this on as feedback. 

Is this issue still unresolved?

I am currently going through the same problem

Hello Lizard3, it still has to be done at the start of the tax year it can't be changed half way through. 

Surely this is something the quickbooks team should fix? Unless every new state pensioner has their birthday in April it creates quite a difficulty. How do I get around this? Do I have to delete all the payroll for the year so far and resubmit everything? 

Ensuring that the correct contributions are deducted from employees' wages is crucial to avoid under or overpayment, Lizard3.

I understand the convenience that comes with having the flexibility to change the National Insurance category, as it enables efficient payroll management. Currently, this can only be done at the start of the tax year in QuickBooks Online. To make modifications for a worker who reached state pension age during the current year, you can consider deleting and then recreating your pay run as a workaround.

Please bear in mind that executing this action will result in the removal of the corresponding FPS, regardless of whether it was submitted to HMRC or not. Thus, it should be done with caution and consideration of the potential impacts on your financial records and tax reporting. Before proceeding, consult your accountant or bookkeeper to verify that the approach you take is compliant and suitable for your specific situation.

As data deletion is irreversible, let's save a copy of your payroll reports and payslips for reference. Furthermore, I recommend contacting our dedicated support team when performing this task. This way, our representative can perform screen-sharing and help you navigate through the entire process carefully, reducing the risk of mistakes. They can also guide you in resubmitting the corrections. Here's how to connect with us:

1. Click the Help icon.
2. Go to the Search tab, then click the Contact Us button.
3. Enter a brief description of your concern in the box.
4. Hit Continue, then select Chat with us or Have us call you.

To learn how to update your employee's tax information and process leavers/retirements, feel free to read these articles:

• Managing employee status
• Edit employees in QBO
• Completing a P45 form

Just tag my name in your comments and posts if you need further assistance with your other payroll tasks. The Community is open 24/7 and always ready to lend a hand!

That's really helpful, thank you. I've changed the employee to Cat C as now at State Pension Age. However NI contributions have been deducted since January this year (he reached 67 on 21st December last year). How does the company reclaim the NI wrongly deducted from January to now? Thanks so much

Also, now I've changed the employee from Cat A to Cat C, Quickbooks no longer recognises him and I can't run the payroll!!! Any ideas???

Hi RDPI, thanks for joining this thread. 

Usually when an employee reaches state pension age, they will receive a notification about an update to their NI letter to stop NI from being taken. If this wasn't updated, you would have to roll back to the pay run that the employee reached pension age on, and make that correction. You would then re-run and re-submit all FPS (when selecting a reason for the overdue submission, select Option H - Correction to earlier submission) which will overwrite and correct figures with HMRC. 

If you have any further Q's, don't hesitate to get back to us below. 

This reply misses the point of the thread.  When you get the NI notification, you can't do anything with it.  You are faced with an employee overpaying. Unless something has changed recently, then rolling back doesn't work as you still can't change the prefix...  its a year since my own problem so I confess I don't recall the detail, but I tried to make the change prior to the relevant pay run and was prevented.

Rolling back the payroll to the start of the year, doesn't work either... that would just make the employee underpay NI.

it's a fault that makes payroll non compliant as far as I can see.