Payrolled Benefits in Kind (PBiK)

You are able to payroll benefits and expenses so that they are taxed throughout the year. If you do so you will not need to create a p11d for each employee but you will need to submit the NI Class 1A liability on a P11D(b).

To payroll your employee’s benefits you need to register this with HMRC before the beginning of the tax year. Once you have registered for PBiK with HMRC you can set this up on NetSuite to run through payroll.

Setting up a Pay Component Sub Type

Example of setting up medical insurance as a monthly PBiK contribution.

1. Name: Medical Insurance

2. Pay Component Type: Company Contribution

3. Pay Component Category: Employee Benefit

4. Taxable: True

5. Jurisdiction: UK

6. Payment Summary Location: Non-reportable

7. Earnings for NI Class: Class 1A

8. Select the P11D Type (I. Private Medical Treatment or Insurance)

9. Select the P11D Sub Type (I. None)

10. Save

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Setting up the Employee Pay Component

1. Navigate to the Employee Record > Payroll Tab > Pay Component Sub Tab and click New Pay Component

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2. Select Company Contribution as the Pay Component Type

3. From the Pay Component Sub Type select the type you created e.g. Medical Insurance

4. Select the UOM (if this is an annual amount = year, monthly = Month, weekly = Week)

5. In Quantity enter the quantity e.g. 1

6. Enter the rate per UOM

7. Amount will calculate as quantity x rate. The “Amount Per Period” is the Amount divided by the UOM (ie if a year on a monthly frequency this is divided by 12, if a month it is divided by 1, etc)

8. In Start Date enter the start date of the pay component. Note that if within the month it will pro rata the amount

9. The P11d Type will auto-source in the background from the sub type you created in the previous steps.

10. Save

In the Pay Run

When you a run a pay run for this employee and the period start date is after the start date of the pay component, this company contribution will be included in the employees pay.

The Company Contribution does not increase Pay, it is a notional increase of Taxable Income only and there is no GL impact associated with the requisite Payslip Details.