Add Benefits in Kind

If you want to payroll benefits and expenses (aka add Benefits in Kind), you must register them with HMRC through the payrolling benefits and expenses online service before the start of the tax year.

For more information, see HMRC’s Guidance on Payrolling.

UK Payroll supports Cars (P11D Section F), Private Health (P11D Section I), Membership (P11D Section N), and Expenses (P11D Section M) benefits only.

How to add Benefits in Kind to payroll

To see how to payroll company cars, see the next section.

1. From the left side bar, select Employees.
2. Select the relevant employee.
3. Navigate to the Pay items tab.
4. Click Add pay item.
5. Select the Benefit type (Private health, Club membership, Expenses payments, Other items) you want to add.
6. Enter the Description, Starting from date, Per payroll value (monthly cost of the benefit), and Making good (the monthly amount an employee contributes, if any, to the benefit).
7. To add the benefit to payroll, mark the PAYE option under Tax Method.
8. If the employee has already paid any amount towards the benefit in this tax year, select Yes under Starting Points and enter the Benefit cost starting point (how much the benefit has cost up until now) and the Making good starting point (the amount of year-to-date contributions from the employee). If the employee hasn’t paid anything towards the benefit in this tax year, select No.
9. Click Next.
10. Review the benefit details in the Summary, then click Save & close.

You’ll see the Benefit in Kind value on your employee’s draft payslip.

How to add cars to payroll

1. From the left side bar, select Employees.
2. Select the relevant employee.
3. Navigate to the Pay items tab.
4. Click Add pay item.
5. Select Company car.
6. Enter the Available from date (the date the car was first made available to the employee). If you know when the car will be returned, mark Yes and enter the Return date. If not, mark No.

   Note: If the car was available to the employee in a previous pay period, but the benefit wasn’t added into UK Payroll, contact Support to resolve the missing payment.

7. If the car has been unavailable for more than 30 consecutive days, mark Yes and enter the Total days the car was unavailable. If this isn’t the case, mark No.
8. Click Continue.
9. Enter the car’s Registration number and click Continue.
10. Enter the car’s details, including the Date of first registration, Car make, Car model, Fuel type, Engine size, and CO2 emissions. Click Continue.
11. Enter the cost details, including the List price of the car, Total cost of accessories, Capital contributions (any amount contributed by the employee towards the cost of the car), Private use deductions (total amount of any payments made by an employee for the private use of the car in the current tax year).
12. If the car is provided via salary sacrifice, mark Yes under Is the car provided via an Operational Renumeration Arrangement? and enter the Amount foregone. If not, mark No.

    Note: Any salary sacrifice deduction should be applied as a separate recurring pay item. If the amount foregone is greater than the calculated yearly cash equivalent, the cash equivalent will be used as the benefit value, unless the CO2 emissions are less than 75g/km.

13. Click Continue.
14. If the business pays for private fuel, mark Yes under Does the business pay for private fuel?. Then, mark whether the fuel was withdrawn during the period of car availability. If it was, enter the date in When was private fuel withdrawn? Then, mark Yes If the fuel was provided via an Operational Renumeration Arrangement and enter the Amount foregone, or mark No if not.

    Note: If the business doesn’t pay for private fuel, mark No. To learn more, see HMRC’s Guidance on Advisory fuel rates.

15. Click Continue.
16. Review the details in the Summary, then click Save and close.

You’ll see the Benefit in Kind value on your employee’s draft payslip.

FAQs

What if I forgot to take a benefit out of an employee’s record that is reported on a P11D?
Contact the support team to ask them to remove the benefit from the employee’s record.