> This is the Markdown of a Backed Help Centre page, https://admin.backed.giving/help/administrator/payments/indexation.md. Every page is listed at https://admin.backed.giving/help/llms.txt.

> This page uses Backed's default terms, such as Funding Round and Application Template. An organisation may rename them, so read each as your organisation's own term if you've renamed it.

A multi-year contract can raise its later payments each year, by a fixed rate or by an index
series. Indexation is applied one contract year at a time: Backed works out the new amounts, you
check them, and applying them changes the milestones. No document or signature is needed.

Year 1 starts on the contract's start date and each later year starts on its anniversary. A
milestone belongs to the year of its due date, and year 1 is never indexed. A contract with no
indexation terms, or with no start date, shows none of this.

This appears only when Payments is turned on for your organisation. Labels that name `Milestone`
and `Contract` use your organisation's own term if you've renamed it.

An [index series](index-series.md) and the value for each period are recorded in your organisation's
payment settings, and a contract's terms come from its grant or from the contract's own setup. Terms can't be changed
once a contract's first year has been applied.

## See that a year is due

`Indexation due` appears at the top of the contract's page from the first day of a contract year
that has milestones and hasn't been applied. It stays there until every due year is applied.

While a year is due, the milestones it will index can't be added to a payment batch: `Add Milestones`
asks you to apply the indexation first, so nobody is paid the old amount by mistake.

## Preview and apply a year

Applying needs `Can access Payments` and `Full Access` to the contract. Without them you still see
`Indexation due`, but `Apply indexation` isn't offered or is refused. See
[Payment permissions and separation of duties](permissions-and-separation.md).

1. On the contract's page, select `Apply indexation`.
2. Check the preview. It opens on the earliest due year and names the method, such as
   `Fixed rate of 3% a year`, or the series and its two values, with the `Factor` they give.
3. Read the table. Each milestone shows its `Current amount`, `Base`, `Uplift` and `Indexed`
   amount, with a `Total` at the foot.
4. Check `Not indexed`, which lists any milestone that keeps its amount and why: `A payment has
   already been made`, `No amount to index` or `In-kind support`.
5. Select `Apply indexation` in the dialog.

Each milestone takes its indexed amount and its GST is worked out again. See
[GST on payments](gst.md). If another year is also due, select `Apply indexation` again.

## What the trail shows

`Variations` on the contract's `Details` tab lists the contract's variations and its applied
indexation together, by date. Each indexation entry, such as `Indexation: contract year 2`, names
the method and the rate or index values, says who applied it and when, and lists every milestone's
`Base`, `Uplift` and `Indexed` amount. An entry has no document, so it links nowhere.

## The Base, Uplift and Indexed columns

Once any milestone on the contract is indexed, or will be, the table on the contract's `Milestones`
tab gains three columns:

- `Base`: the amount before indexation.
- `Uplift`: what indexation adds.
- `Indexed`: the amount after indexation.

The columns stay empty for a milestone indexation doesn't touch, such as one in year 1. A year that
hasn't been applied is marked, and its figures can still change:

- `Projected`: the uplift and indexed amount are worked out but not yet applied.
- `To be indexed`: an index series year with no value recorded, so `Uplift` is empty and no indexed
  amount can be said yet.

Applicants see the same figures on their own milestones list.

## If Backed refuses

- `This contract year has not started yet, so its indexation is not due.` The year's first day
  hasn't arrived. Apply it on or after that day.
- `The indexation for this contract year has already been applied.` Someone applied it before you
  did, and a year can only be applied once. Cancel and check the trail.
- `Record the index series value for this contract year before applying its indexation.` The
  contract uses an index series and this year's value is missing. Record it, then try again.

If a milestone's amount changes while the preview is open, Backed doesn't apply the old figures. It
says `An amount changed after this preview was read. Check the new figures below, then apply again.`
and shows the new preview.

A value recorded after a year was applied changes nothing already applied.

## See also

- [A contract](../contracts/a-contract.md)
- [Building a payment batch](building-a-batch.md)
- [GST on payments](gst.md)