There may be times when you need to process a redundancy payment in Sage 50cloud Payroll. These payments are usually free of tax and national insurance (NI) up to the value of £30,000.
To process this in Sage 50cloud Payroll, you can create a post tax and post NI payment up to value of £30,000. If the value of the payment is above £30,000 you also need to set up a termination payment subject to Class 1A national insurance.
For example, if your employee is to receive a £40,000 termination package, you should pay £30,000 against the post tax and post NI payment and £10,000 against the termination payment.