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Rounding on Invoices

Calculations and Rounding on Invoices

PennyPerfect can calculate the pension contributions on a per session basis or a per invoice basis. The two different methods can give slightly different total figures because of rounding as demonstrated below. Rounding differences are more likely when there is a high number of sessions in a month.

The per session method ensures the amount invoiced stays consistent regardless of how the sessions are split across invoices i.e. if there are many sessions on a single invoice or they are split across multiple invoices, the total amount invoiced across all of these invoices remains the same and is guaranteed to match the figure on the pension forms. If the calculation method for the pension contributions is done on a per invoice basis, the total figure across invoices can vary depending on how the sessions are split across the invoices.

The choice is given because historicaly PennyPerfect calculated the contribution per session, but some users were asked to recalculate by the pensions agency because of the rounding issue. The method can be selected on the Options screen on the Pension tab. If you do change this its best to do it at the start of a month before any invoices and pension forms have been calculated to ensure the same method is used when creating the invoices and pension forms i.e. don't create invoices, then change method to create the pension forms.

Selecting the contribution calculation method

The two examples below show how the same sessions can result in a different contribution (£84.10 vs £84.12) depending on whether its calculated per session, or per invoice.

Method A. Contribution calculated per session

Five sessions, the contribution is calculated per session, then all these contributions combined to get the total contribution.
Date  Rate  Pensionable  Contribution (14.38%)
Mon 12 May£130.00£117.00£16.82
Tue 13 May£130.00£117.00£16.82
Wed 14 May£130.00£117.00£16.82
Thu 15 May£130.00£117.00£16.82
Fri 16 May£130.00£117.00£16.82
Total Contribution£84.10

Method B. Contribution calculated per invoice

Five sessions, the contribution is calculated after all the sessions have been totalled.
Mon 12 May£130.00 
Tue 13 May£130.00 
Wed 14 May£130.00 
Thu 15 May£130.00 
Fri 16 May£130.00 
Total Sessions £650.00
Pensionable (90% of Sessions) £585.00
Contribution (Pensionable * 14.38%) £84.12

Pension legislation is complex and subject to change. PennyPerfect make no claim the information represented here is correct, or that the pension calculations within the PennyPerfect software are correct.