Enter on the Employment screen details of your client’s earnings from employment including salary, wages, commissions and bonuses. Other sources of income that are not subject to National Insurance, such as rental income or royalties, should be entered separately as Other Income.
For clients who are company owners who receive income in the form of dividends, these too can be entered under employment, provided you set the income Source to Company Owner.
On this screen you will enter the details of your client's employment, including salary, wages, commissions and bonuses.
1. Open the existing client record, if it is not already open.
2. Click/tap the plus button in the bottom right of the Dashboard screen.
3. Click/tap Income in the Finances and Accounts section of the menu which appears:
4. In the next screen click/tap the relevant option.
Use Employment for earned income,
Other Income for non-earned income such as rental income.
Employment income is taxed as earned income, Other Income gives you the option of tax free or taxable, and if taxable, which type of tax should be applied.
Windfall is used for one-off inflows such as an inheritance, click here to read more about inputting windfalls.
5. Complete the data entry fields which appear in the Basics screen (those marked with an asterisk are mandatory fields). Ensure you select the correct owner of the income so that the taxation is calculated for the correct person. The fields shown will depend on the income type and the source selected e.g. for employment income, if the source is company director there will be an additional field for dividend income.
6. Owner: Select in this dropdown list the name of the earner.
7. Name: Enter a name for the income. This can be anything you like, provided that it is appropriately descriptive for later, when reviewing the case with your client.
The names of items must be unique within a given client case, both as a requirement made by the software and also as a best practice. It is much easier to track and review uniquely named items.
8. Source: Select one of the following.
Employed – If your client receives earnings subject to UK income and NI taxes.
Self Employed – If your client is self-employed. Class 4 NI for self-employed individuals will be applied to any earnings and taxes will be assumed to be paid following assessment, in the subsequent year of the plan. The option is available, however, to tick “Tax as PAYE”, if taxes should be paid over the course of the year via pay-as-you-earn (PAYE). Read more >>
Company Owner – If your client is the owner of a company who may receive income as dividends. Dividend income is taxed at the dividend rate whereas earnings from a salary are taxed as income. Taxes are assumed paid over the course of the year via pay-as-you-earn.
9. Salary: Enter your client’s gross annual salary before pension contributions and taxes.
Tip - Enter Gross Income: enter employment incomes in gross amounts – i.e. pre-tax, before the deduction of any pension contributions. Voyant Adviser will do the tax calculations for you. Pension contributions made from supporting salaries will also be deducted from this gross income. You may need to "gross up" income in cases where your client has provided a net income figure.
10. Frequency - Select Annually or click the drop down to select Monthly or another frequency option.
Additional frequencies are:
- Biweekly, every other week (fortnightly), 26 times per year;
- Semimonthly, twice monthly, 24 times per year;
- Quarterly, 4 times per year;
- Semiannually, twice yearly, 2 times per year.
Tip - Frequency and One-Off Incomes: If you are entering a one-off income, it is likely that you would select Annual, unless you intend the Salary to be multiplied by twelve, as would be the case with a monthly figure.
11. Bonus / Commissions: If your client expects future income from bonuses or commissions, enter a total annual average of this income from bonuses and/or commissions.
12. Dividends (company owners only): If your client is a company owner and receives income as dividends, enter these as an average annual amount the client receives gross of personal dividend tax. Note that the software does not model corporate taxes.
Note - The Annual Dividend field will be shown only conditionally, if the Income Source is set to Company Owner.
Tip - Taxing Dividends: the software does not calculate the corporation tax paid by the company; it only calculates your client’s personal taxes. Any personal dividend taxes due on dividend income, will be calculated at the end of year tax assessment and shown as Additional Dividend Taxes on the annual tax summary in Year View > Taxes. The expense for this tax will show in the following year.
13. Benefits in Kind: Enter as an annual total the value of any taxable benefits in kind your client expects to receive on a regular basis. These benefits will be taxed accordingly, but are not subject to NI and will not appear in the cash flow project as inflows.
14. The Growth Rate will show the default rate from the National Average Earnings (UK/US) or Income Rate (Ireland/Canada) assumption shown in Plan Settings. You can amend this growth rate by clicking Edit. Amending the growth rate here will only affect this income item, it will not affect any other items in the plan.
Timing - Set the start and end of the income
Check the Timing tab located on the left side of the screen. Selections on this screen are used to set the time span over which the income will be earned.
Unless you ticked “already retired” when first setting up the client case, the Employment Starts and Employment Ends events are selected by default, indicating that this salary will be earned from the beginning of the plan (the Start event) until your client’s planned retirement, the earner's Retirement event.
The period over which these earnings are expected are also highlighted in the timeline as are the events that set the beginning and end of the earnings.
Note – As a rule, items such as earnings, are set to start at the beginning of the year of their start event. The same applies to their end. John’s salary, in this case, will end at the beginning of the year in which he turns 65, based on the selected end event. AdviserGo does not do partial year calculations in pro rata amounts. Only full year calculations are performed to keep things focused on big picture, broad stroke financial planning.
Selecting alternative start or end events - How to begin or end incomes in other years of the plan
You don’t have to stick with the software’s default timing for incomes.
If an alternative start or end event is already on the timeline, either:
Drag and drop the event from the timeline below into the Employment Starts or Employment Ends boxes above the timeline, or
Click the event icon and select Set as Start Event or Set as End Event.
Tip - One-off Incomes: If the income is a one-off, only to be earned in a single year of the plan, use two events in the same year as the income's Start and End Events.
How to add an event to the timeline on the fly, for use as an alternative start or end event for the income
If you ever need to begin or end an income in a different year of the plan, events can be easily added to the timeline on the fly, as you enter or edit the income.
Viewing the income’s Timing tab,
Double click any bar above the timeline.
The add Event dialogue will display. Enter a Name for the event and choose an appropriate icon to represent it in the timeline (as pictured below). The event will be assumed to have the same owner as the income it will be used to schedule.
If you need to reposition the event, select the new event’s icon, and drag and drop it up or down the timeline.
As you move the event, the future age of its owner will be shown beneath the timeline – the owner’s age in the event’s original position and the owner’s age for the year over which the event is repositioned. You can also easily reposition this event later, on the Timeline screen.
To the right side of the dialogue, select whether the event will be used as the income’s Start Event or End Event, as shown below.
Repeat these steps if you need to add a second alternative event to begin or end the income. Click Save, top right, only after you’ve completed all your entries for the income.
Save the income or save and add another income
16. Click the Done button, top right, to save your changes.
Tip - If you need to add another income, click the down arrow next to the Done button, top-right, and select Save + Add Another. This drop-down option will save the income into the plan and allow us to continue entering additional income.
Where can I see the income in the plan?
The income can be seen in the Cash Flow chart in either the Dashboard or the Let's See screen.
Click the Detailed View button to see the source of the inflows. Click on a bar of the chart to see the headline numbers for that year.
Click the Year View button to see the detailed breakdown of the numbers behind the chart.