2688850 - PY-GB: Payrolling Benefits April 2018 onwards - UPDATED

Version management:

V1: First version  31.08.2018

V2: Attachment updated 12.11.2019

V3: Attachment updated 10.12.2019

V4: Attachment updated 14.12.2022

V5: Attachment updated 01.03.2024

V6: Attachment updated 19.03.2025

V7: HMRC announcement, Employer Bulletine update

In the June Employer Bulletin, released by HMRC on 18th June 2025, made a recommendation for employers to start payrolling benefits from April 2026 to  'help you familiarise yourself with the process of reporting BIKs through payroll' Employer Bulletin: June 2025 - GOV.UK

As SAP are anticipating there being extensive changes within the existing payroll and RTI processing SAP recommend any customers not yet live with Payrolling of Benefits should delay their implementation until April 2027.

For further information please read PY-GB: Important Information - Payrolling of Benef... - SAP Community

When an employee elects to sacrifice part of their salary towards a company vehicle, SAP will perform a comparison between the salary sacrifice and taxable benefit figures to determine which of the two is higher.

By performing this comparison and determining the higher value, SAP will then know whether to use the calculation method used in HMRC P11D Working Sheet 2, where the taxable benefit of the vehicle is higher than the salary sacrifice figure, or HMRC P11D Working sheet 2b where the salary sacrifice is the higher value.

https://www.gov.uk/government/publications/paye-draft-forms-p11d-and-p11d-working-sheets-2017-to-2018

SAP have also taken the opportunity to align how Regular Payments are calculated to bring the proration calculation in line with how vehicle unavailability is calculated for taxable benefit.

The attached document only covers employees who have their vehicle benefits taxed through payroll.

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• Human Capital Management (HCM)
• SAP R/3
• SAP R/3 Enterprise 4.7
• SAP ERP Core Component
• SAP ERP
• SAP enhancement package for SAP ERP
• SAP enhancement package for SAP ERP, version for SAP HANA
• SAP SuccessFactors Employee Central integration to SAP Business
• SAP SuccessFactors Employee Central Payroll

SAP ERP Central Component all versions ; SAP ERP all versions ; SAP R/3 Enterprise all versions ; SAP R/3 all versions ; SAP SuccessFactors Employee Central Payroll all versions ; SAP SuccessFactors Employee Central integration to SAP Business Suite all versions ; SAP enhancement package for SAP ERP all versions ; SAP enhancement package for SAP ERP, version for SAP HANA all versions

Payrolling Benefits in Kind, PBIK, BIK, OPRA, Optional Remuneration Arrangements, Salary Sacrifice for Company Vehicles , KBA , PY-GB , United Kingdom , How To