Payment Models Explained

Payment Models Explained

PAYE

In this PAYE model, employees pay only employee costs listed below. All other employer related costs are covered by the employer. This model is typically used for 
  • Agencies looking for a fully outsourced PAYE solution
  • Employers running their own in house payroll 

The below statutory Employee Deductions are paid for by the employee under this model 

  • Tax
  • Employee's National Insurance
  • Employee's Pension (where applicable)

 The below statutory Employer Deductions are paid for by the employer under this model 

  • Employer's National Insurance
  • Employer's Pension (where applicable)
  • Apprenticeship Levy
PAYE Hybrid
This model is identical to PAYE but the below do not apply to employees set up under this model
  1. No statutory payments
  2. No Holiday Pay
  3. No Pension
Umbrella
Umbrella allows your employees to maximize their take-home pay while enjoying the full range of employment rights. These include:
  • National Minimum Wage Protection
  • Holiday pay
  • Sick pay
  • Maternity/Paternity pay
  • Company pension benefits

Additionally, your employees maintain a continuous employment record, which is especially useful when applying for loans or mortgages.

This setup ensures that your employees have both financial advantages and job security while benefiting from the flexibility Nxsys Umbrella offers.

Unlike PAYE, in Umbrella you can charge your employees a margin for processing their payroll and employees will pay for all costs (both employee and empoyer deductions) which include the below statutory costs 

  • Employer's National Insurance
  • Employer's Pension (where applicable)
  • Apprenticeship Levy

  •  Tax
  • Employee's National Insurance
  • Employee's Pension (where applicable)
Umbrella Hybrid
This model is identical to Umbrella but the below do not apply to employees set up under this model
  1. No statutory payments
  2. No Holiday Pay
  3. No Pension

CIS & Non CIS

If your subcontractors work in the construction industry and are not subject to Supervision, Direction, or Control (SDC), CIS may be an ideal solution for you to enjoy the benefits of self-employment. Similarly, if your subcontractors are deemed self employed but do not work in the construction industry you can set them up under Non CIS

In both these payment models, there is no Tax, National Insurance, Pension or Apprenticeship Levy deductions. 

Instead, for CIS subcontractors, you can charge your subcontractors a margin for processing their payroll and depending on each subcontractor's status the system will automatically make the relevant deductions. 

In Non CIS, subcontractors are charged a margin only and no other deductions



    • Related Articles

    • Payment Rates

      Nxsys has a default list of Payment Rates that are used to create or import timesheets but also allows you to create an unlimited number of other Payment Rates and configure them to your needs. Code --> System generated number (leave this untouched) ...
    • Payroll Summary Reports

      The payroll reports are available for both CIS and Umbrella/PAYE once the payroll has been ran through the Confirm Payroll stage. This will show a payroll line for each worker processed and you will also be able to view a copy of the Payslip/Selfbill ...
    • Draft Payroll Reports

      The draft payroll reports are available for both CIS and Umbrella/PAYE once the payroll has been ran through the Draft payroll stage. This will show a draft or 'Dummy' payroll line for each worker processed and you will also be able to view a copy of ...
    • Full Payment Submission

      FPS needs to be submitted to HMRC on or before the payment date. Late submissions of FPS can incur hefty fines from HMRC. When a bank file has been downloaded and payment has been confirmed, an FPS submission will be available to submit. From your ...
    • Employer Payment Summary

      EPS needs to be submitted to HMRC between the 6th and 19th of each month for the previous period. Nxsys automatically submits an EPS to HMRC on the 10th of each month for the previous period, so that if any errors occur, they can be corrected before ...