Take-on values are the historical year-to-date figures entered when an employee joins a payroll part-way through a tax year - typically when an employer switches payroll systems or takes on staff mid-year. They carry the prior earnings and tax forward.
What it means
PAYE, the rebates and the medical credits all work on a year-to-date basis, so a system that only knows about an employee from, say, period 7 would miscalculate their tax. Take-on values supply the earlier periods' earnings, deductions and PAYE, so annualisation and the year-end reconciliation work on the full picture rather than a partial one.
Where it fits in
Take-on values are loaded against the employee at onboarding and feed into the year-to-date totals the engine uses. They are essential for an accurate EMP501 reconciliation and a correct IRP5, since both report the whole tax year, not just the period the employee was on the new system.
Key rules
- Year-to-date figures captured when onboarding mid tax-year.
- Carry prior earnings, deductions and PAYE forward.
- Needed for correct annualisation and tax for the rest of the year.
- Essential for an accurate EMP501 and IRP5 covering the full year.
