Benefit in Kind (BIK) values are normally applied in full for each payroll period. The Pro Rata BIK feature changes this behaviour for employees who start or leave employment part-way through a period. When enabled, PeopleXD calculates a proportional BIK value based on the number of days the employee was active within that period, rather than applying the full amount.
This ensures that leavers and starters are charged an accurate BIK figure that reflects their actual days of employment, rather than a full-period charge regardless of start or leave date.
📌Note: This feature is disabled by default. Existing BIK processing is not affected until the parameter is explicitly enabled.
Key facts
The table below displays the key facts for Benefit in Kind.
Item | Detail |
Feature name | Pro Rata Benefit in Kind |
Applies to | Employees who start or leave mid-payroll period |
Jurisdiction | UK |
Default setting | Disabled — must be explicitly enabled |
Configuration screen | System Configuration (PAYUT009) |
Navigation | Settings › System Configuration |
Feature flag | apply_pro_rata_on_bik |
Backward compatibility | Fully preserved when disabled — no BIK values change unless parameter is set to Y |
Prerequisites
Before enabling Pro Rata BIK, confirm the following:
You have payroll administrator access to the System Configuration screen (PAYUT009).
You are aware of which employees in the current open period have BIK start or end dates that fall within that period. Enabling the parameter will change BIK values for those employees from the next payroll run.
You understand that this feature applies to the current payroll period only. It does not apply retrospectively to previous periods or to arrears calculations.
Configuration
Pro Rata BIK is enabled via a single parameter in System Configuration.
Click Settings then click System Configuration (screen reference PAYUT009).
Search for the parameter apply_pro_rata_on_bik.
To enable pro rata calculation, set the value to Y.
To save the configuration, click Save.
📌Note: The change takes effect from the next payroll run. To revert to full BIK amounts at any time, set the parameter back to N.
Menu reference
The Pro Rata BIK parameter is part of the existing System Configuration screen. No new menu options were added for this feature.
Menu option | Reference |
System Configuration | PAYUT009 |
How it works
Pro rata is triggered for a BIK record when either:
The BIK start date is after the period start date (employee is a starter mid-period), or
The BIK end date is before the period end date (employee is a leaver mid-period).
If neither condition is met, that is, the BIK spans the full period, the standard full BIK amount is applied, regardless of whether the parameter is enabled.
The calculation
Pro Rata BIK = (Standard BIK Value ÷ Days in Period) × Pro Rata Days
Term | Definition |
Standard BIK Value | The employee's BIK value for the period |
Days in Period | Total days in the payroll period (calendar or working days — see Day Basis below) |
Pro Rata Days | The number of days the BIK was active within the period |
Pro Rata Start | The later of: BIK start date or period start date |
Pro Rata End | The earlier of: BIK end date or period end date |
Pro Rata Days = (Pro Rata End − Pro Rata Start) + 1. The system automatically clamps the BIK active range to within the current period — date ranges do not need to be manually adjusted.
Example: An employee with a monthly BIK of £600 leaves on the 10th of a 30-day period. Pro Rata Days = 10, Days in Period = 30. Pro Rata BIK = (£600 ÷ 30) × 10 = £200. Without this feature, the full £600 would have been applied.
Day basis
The calculation uses the same day basis as the employee's pay group, ensuring consistency with other payroll calculations for that group.
Day basis | Days in period | Pro rata days |
7-day (calendar days) | (Period end − Period start) + 1 | (Pro Rata end − Pro Rata start) + 1 |
5-day (working days) | Count of Mon–Fri within the period | Count of Mon–Fri within the pro rata range |
The working day calculation excludes Saturdays and Sundays. Public holidays are not excluded. Day basis is configured at pay group level.
Scope and exclusions
The Pro Rata BIK feature applies to the current active payroll period only.
Scenario | Pro Rata applies? |
Starter whose BIK begins mid-period | Yes |
Leaver whose BIK ends mid-period | Yes |
Employee active for the full period | No — full BIK applied |
Arrears period calculation | No — full BIK applied |
Retrospective payroll period | No — full BIK applied |
Weekly net pay (monthly pay group) | No — weeks-based calculation used instead |
⚠️ Important: Arrears and retrospective periods are out of scope by design. Where an arrears or retro calculation is triggered, the full BIK amount applies regardless of the parameter setting.
Frequently asked questions
Does enabling this feature change BIK for all employees?
No. It only affects employees whose BIK start or end date falls within the current open payroll period. Employees active for the full period are unaffected.
Does it apply to previous periods?
No. The feature applies to the current active payroll period only. It has no retrospective effect on previously processed periods.
What happens if I disable the feature after enabling it?
Setting the parameter back to **N** restores full BIK processing from the next payroll run. Previously processed periods are not affected.
Does this apply to arrears or retro runs?
No. Arrears and retrospective calculations are explicitly excluded. The full BIK amount continues to apply in those scenarios.
Which pay groups does this affect?
All pay groups are subject to pro rata when the parameter is enabled. However, the day basis used in the calculation (calendar or working days) is determined by each pay group's own configuration.
Support and further information
For queries relating to BIK configuration within PeopleXD, refer to the System Configuration guide (PAYUT009) or raise a support case with Access via the standard support channels.
For more information, HMRC guidance on BIK reporting and payrolling of benefits, refer to HMRC expenses and benefits guidance.