How to Add a Benefit in Kind

Payrolling Benefits in Kind

If you’re intending to payroll benefits and expenses, you must register them with HMRC using the payrolling employee's taxable benefits and expenses service. You must do this before the start of the tax year.

Adding them to Pento

To set up payrolled benefits, you will need to follow the steps below:

1. Navigate to Employees from the left sidebar
2. Search for the relevant employee
3. Under the employee's name, select the Pay Items tab
4. Select Add pay item
   
   
5. The following options will appear:
   
6. Select the Benefit type you want to add (E.g. Private Health), and the following (or similar) page will appear:
   

You will then need to enter the details of the benefit.

Title

1. Enter the name of the benefit E.g. Private Medical.

Per Payroll Value

1. Enter the monthly cost of the benefit.

Making Good

1. Enter the monthly amount an employee contributes (if any) to the benefit.

Benefit Cost Year to Date

• If you are setting up the benefit part way through the tax year, then you will need to enter the Year to Date cost of the benefit from April (E.g. in the example above, you would need to enter the Year to Date cost of the benefit from April → July).

Making Good Year to Date

• If you are setting up the benefit part way through the tax year, then you will need to enter the Year to Date contributions the Employee has made toward the benefit from April (E.g. in the example above, you would need to enter the Year to Date contributions toward the benefit from April → July).

Starting from

1. Enter the date you are starting to payroll the benefit in Pento.

Tax method

For payrolled benefits, please ensure you select the PAYE (payrolling benefits) option.

The following table rows beneath the options will update based on the information you provide:

• Payrolled Benefit
  This is the taxable amount that will appear on the payslip each month. E.g. Benefit cost less the making good amount.
• Cash Equivalent
  This is the annual taxable amount for the employee (please note, this is pro-rated from the date the benefit starts e.g. in the example above, it is monthly taxable of £100 x 8 (August → March)).

The employee's payslip will look similar to the below:

Tracking P11D Benefits in Kind

To set up P11D benefits, you will need to follow the steps below:

1. Navigate to Employees from the left sidebar
2. Search for the relevant employee
3. Under the employee's name, select the Pay Items tab
4. Select Add pay item
   
   
5. The following options will appear:
   
6. Select the Benefit type you want to add (E.g. Private health), and the following (or similar) page will appear:
   

Title

1. Enter the benefit title e.g. Private Medical.

Per Payroll Value

1. Enter the monthly cost of the benefit.

Making Good

1. Enter the monthly amount an employee contributes (if any) to the benefit.

Benefit Cost Year to Date

• If you are setting up the benefits part way through the tax year, then you will need to enter the Year to Date cost of the benefit from April (E.g. in the example above, you would need to enter the Year to Date cost of the benefit from April → July).

Making Good Year to Date

• If you are setting up the benefits part way through the tax year, then you will need to enter the Year to Date contributions the Employee has made toward the benefit from April (E.g. in the example above, you would need to enter the Year to Date contributions toward the benefit from April → July).

Starting from

1. Enter the date you are starting to track the benefit in Pento.

Tax method

Please ensure you select P11D (after year-end) option.

The following table row beneath the options will update based on the information you provide:

• Cash Equivalent
  This is the annual taxable amount for the employee (please note, this is pro-rated from the date the benefit starts e.g. in the example above, it is monthly taxable of £100 x 8 (August → March)).

What should I do if I forgot to take a benefit out of an employee’s record that is reported on a P11D?

You may find yourself in a situation where you have an employee who had a benefit, for example healthcare, from April - August, but it slipped your mind to remove the value from the record in September, leading to an additional value being held against the employee incorrectly.

In order to correct this to ensure that the correct value is reported on the P11D at the end of the tax year, please contact the Customer Support team and ask them to remove the additional values from the employee in question.

Automatic P11D and/or P11d(b) reporting

You will need to enable reporting in your Company Settings in Pento. To do this, follow the steps below:

1. Navigate to Settings from the left sidebar.
2. Under the Company heading, select General
3. Select Enable P11D & P11D(b) Reporting.

Once enabled, you can choose to enable Send P11D's to each employee via email.

These will be sent to employees' email addresses before the deadline of 6th July.