Recording the BIK and Employee Contribution Amount

If an employee is paying for part of a Benefit in Kind (such as health insurance (PMI) or other employer-provided benefits), enter the annual contribution amount when recording the BIK on the employee's record.

Annual amounts (tax year basis)

• The 'Cost' value is the annual value of the benefit for the tax year
• The 'Employee Contribution' amount is the annual amount the employee is paying towards it
• Both must be based on the tax year (not calendar year)

If the benefit started mid-tax year:
Pro-rata both the benefit cost and the employee contribution amount for the remainder of that tax year.

Deducting the Employee's Contribution from Pay

As BrightPay cannot determine payment frequency or timing of employee contributions (weekly, monthly, one-off, quarterly, etc.), you must manually enter the deduction amount on the payslip.

How to add the deduction:

1. Go to the employee's payslip
2. Go to the Additions and Deductions section
3. Add a new deduction for the BIK contribution amount
4. Enter the periodic amount to be deducted

For recurring contributions:

• Click the spanner icon when adding the deduction
• Enable 'Repeat until manually removed' or 'Repeat up to [date]'
• Enter the end date if applicable

Important: NET deduction only

Employee BIK contributions must be taken from NET pay only. When adding the deduction:

• Ensure the 'Deduct before tax, NIC, pensions' fields are unticked
• This ensures the contribution does NOT reduce taxable, NICable, or pensionable gross pay
• The employee pays from their net pay after all statutory deductions such as tax, NI, SLD and pensions have been calculated. The taxable / NICable / pensionable gross pay should not be affected in any way.