Difference between revisions of "How do I set up a pension scheme in Platinum Payroll?"

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== Summary ==
 
== Summary ==
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The following article explains how to set up Pension Schemes. This enables the system to calculate contributions correctly.  
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The following article explains how to set up Pension Schemes, including Auto Enrolment Schemes. This enables the system to calculate contributions correctly.  
  
 
== More Information ==
 
== More Information ==
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* Go to {{PayrollSettings|Company Parameters|Period Adjustments}}.
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* Go to {{PayrollSettings|Company Parameters|Pension Schemes}}.
  
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=== General Details ===
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=== What do I need to know? ===
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The information that you need to create a pension scheme should be provided by the people who arranged the pension scheme for you, and any questions should first be aimed at them.
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The information that you need to create a pension scheme should be provided by the people who arranged the pension scheme for you, and any questions should first be aimed at them. Please make sure you have these details:
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There is information required for both the Employee and the Employer, depending on whether the employer contributes to the scheme. Most of the fields and their purpose are the same for both employee and employer and are explained below.
 
  
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==== Description ====
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* The Pension Company.
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Enter a description for the pension scheme.
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* Which Earnings Limits apply e.g. Qualifying Earnings.
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* Whether it is a {{DataValue|Relief at Source - Net Contributions}} or {{DataValue|Nett Pay - Gross Contributions}} scheme.
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* Whether the settings differ for Employee and Employer.
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==== Pension Details ====
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Choose the next blank line and enter the scheme name (max 15 characters).
  
 
==== Tax ====
 
==== Tax ====
 
What is the tax and NI treatment of the employee contributions? If you are not sure, check with your pension adviser.
 
What is the tax and NI treatment of the employee contributions? If you are not sure, check with your pension adviser.
  
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* {{DataValue|Y}} - Yes. The contribution made by the employee is subject to tax. I.e. it is included in taxable gross pay. This is the "Relief at Source" method.
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* {{DataValue|Y}} - Yes. The contribution made by the employee is subject to tax i.e. the contribution is deducted from Gross Pay after PAYE has been deducted. This is the "Relief at Source" method.
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* {{DataValue|N}} - No. The contribution made by the employee is not subject to tax. I.e. it is not included in taxable gross pay. This is the "Net Pay" method.
 
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* {{DataValue|S}} - Salary Sacrifice. The notional employee contribution is paid by the employer and is not subject to tax or NI. I.e. it is not included in taxable gross pay or earnings for NI purposes. This is the "Salary Sacrifice" method.
 
  
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* Click this link to check the definition of the type of scheme you are involved with [http://www.nidirect.gov.uk/workplace-pensions-and-tax-relief Workplace pensions and tax relief]
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* {{DataValue|N}} - No. The contribution made by the employee is not subject to tax i.e. the contribution is deducted from Gross Pay before PAYE is calculated. This is the "Net Pay" method.
  
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{{Note|title=Note|text=If you choose to run the NEST scheme for auto-enrolment, the contributions are taxed at source and are generally a percentage of Gross Pay. NEST reclaim the tax from HMRC and add it to your pension contributions. This means that you will need to reduce the percentage deducted from the employee by the basic rate of tax and set this {{DataPrompt|Tax}} flag to {{DataValue|Yes}}. Do NOT reduce the percentage for the employer. For example, if the employee and employer are contributing {{DataValue|1%}} each to the scheme with the basic rate of tax at 20%, then the employee percentage should be {{DataValue|0.80%}} (1-0.2), while the employer percentage should be left at {{DataValue|1%}}.
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* {{DataValue|S}} - Salary Sacrifice. The notional employee contribution is paid by the employer and is not subject to tax or NI. I.e. it is not included in taxable gross pay or earnings for NI purposes. This is the "Salary Sacrifice" method.
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* You should be able to check the exact values to be deducted with your pension provider. You can get a good estimate of the values at this link to [https://www.moneyadviceservice.org.uk/en/tools/workplace-pension-contribution-calculator the Money Advice Service pension calculator] - this can provide a good guide but may not be definitive.}}
 
  
 
==== % ====  
 
==== % ====  
 
Is the Value, entered in the {{DataPrompt|%/Value}} column to the right, a Percentage?  
 
Is the Value, entered in the {{DataPrompt|%/Value}} column to the right, a Percentage?  
  
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* {{DataValue|Y}} - Yes, the value is a Percentage.
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* {{DataValue|Y}} - Yes, the value is a Percentage. Auto Enrolment schemes are typically a percentage.
 
* {{DataValue|N}} - No, the value is an Actual Value.  
 
* {{DataValue|N}} - No, the value is an Actual Value.  
  
 
==== %/Value ====
 
==== %/Value ====
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Enter the {{DataValue|Percentage}} or {{DataValue|Actual Value}} which the employee or the employer will contribute to the pension scheme. This is a default field which can be left blank. When you are linking a scheme to an employee you can amend the employer's contribution for an individual, if it differs from the default.
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* {{DataValue|%}} - The percentage to deduct. For a {{DataValue|Relief at Source}} scheme the Employee Percentage should be reduced by 0.2% e.g. a 1% contribution should be entered as 0.8%. Do NOT reduce the Employer contribution.
  
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* Percentage: - The Percentage of the Pensionable Gross to contribute to the pension by the employee or employer (the Pensionable Gross may be limited by the Upper & Lower NI Limits).
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* {{DataValue|Actual Value}} - This is a default field which can be left blank. When you are linking a scheme to an employee you can amend the employer's contribution for an individual, if it differs from the default.
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* Actual Value: The Actual Value the employee or employer will contribute to the Pension Scheme.
 
  
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{{Note|title=Note|text=You will need to know how tax relief applies to the Employee contributions. You should find this out from your pension provider. Under the NEST scheme, the tax relief is claimed "at source", in other words, NEST claim the tax back from HMRC. In these circumstances, to deduct the correct figure you will need to reduce the employee percentage contribution by the basic rate of tax as noted above. Do NOT reduce the employer contribution.}}
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{{Information|text=Click this link to check the definition of the type of scheme you are involved with [http://www.nidirect.gov.uk/workplace-pensions-and-tax-relief Workplace pensions and tax relief]. Queries regarding claiming tax back should be aimed at your Pension Provider.}}
  
 
==== Limits ====
 
==== Limits ====
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* {{DataValue|L}} - Limited to the NI Lower Earnings Limit only.  
 
* {{DataValue|L}} - Limited to the NI Lower Earnings Limit only.  
 
* {{DataValue|U}} - Limited to the NI Upper Earnings Limit only.  
 
* {{DataValue|U}} - Limited to the NI Upper Earnings Limit only.  
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* {{DataValue|B}} - Apply the percentage to pensionable gross between the NI Lower Earnings Limit and Upper Earnings Limit.  
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* {{DataValue|B}} - Apply the percentage to pensionable gross between the NI Lower Earnings Limit and Upper Earnings Limit. Typically known as {{DataValue|Qualifying Earnings}}.
 
* {{DataValue|E}} - Limited to the NI Upper Earnings Limit only (now same as {{DataValue|U}} but differed previously).  
 
* {{DataValue|E}} - Limited to the NI Upper Earnings Limit only (now same as {{DataValue|U}} but differed previously).  
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* {{DataValue|O}} - Apply the percentage to pensionable gross between the NI Lower Earnings Limit and Upper Earnings Limit (now same as {{DataValue|B}} but differed previously).  
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* {{DataValue|O}} - Apply the percentage to pensionable gross between the NI Lower Earnings Limit and Upper Earnings Limit (now same as {{DataValue|B}} but differed previously). Typically known as {{DataValue|Qualifying Earnings}}.
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== Automatic Enrolment Scheme ==
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If this is your Auto Enrolment scheme:
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* Enter the line number, as shown to the left of the scheme description, in {{DataPrompt|Automatic Enrolment Scheme}}.
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Please make sure you have completed the Staging Date to activate Auto Enrolment. 
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{{Note|text=If your staging date falls in the current [[How do I Run a Payroll Period?|Payroll Period]] please be aware the system may start making deductions immediately.}}
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== Allocating a Scheme to an Employee ==
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To allocate an individual Pension Scheme to an employee, go to the {{Tab|TAX, NI & Pension}} page in the Employee record. You can amend the default Employee and Employer's contribution if necessary. You can also enter voluntary top up contributions for both the Employee and the Employer if applicable.  
  
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To allocate a Pension Scheme to an employee, see Employee Amendments - TAX, NI & Pension. You can amend the default Employee and Employer's contribution if necessary. You can also enter voluntary top up contributions for both the Employee and the Employer if applicable.  
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{{Note|text=This is not necessary for Automatic Enrolment schemes. The system will set the scheme for you when the first period of enrolment is closed.}}
  
 
== See also ==
 
== See also ==

Revision as of 22:03, 24 January 2017

 This article or section is under review.
Be aware: Content may change as the document is reviewed.

Summary

The following article explains how to set up Pension Schemes, including Auto Enrolment Schemes. This enables the system to calculate contributions correctly.

More Information

  • Go to " Payroll Maintenance Options Payroll Settings Company Parameters Pension Schemes".

What do I need to know?

The information that you need to create a pension scheme should be provided by the people who arranged the pension scheme for you, and any questions should first be aimed at them. Please make sure you have these details:

  • The Pension Company.
  • Which Earnings Limits apply e.g. Qualifying Earnings.
  • Whether it is a 'Relief at Source - Net Contributions' or 'Nett Pay - Gross Contributions' scheme.
  • Whether the settings differ for Employee and Employer.

Pension Details

Choose the next blank line and enter the scheme name (max 15 characters).

Tax

What is the tax and NI treatment of the employee contributions? If you are not sure, check with your pension adviser.

  • 'Y' - Yes. The contribution made by the employee is subject to tax i.e. the contribution is deducted from Gross Pay after PAYE has been deducted. This is the "Relief at Source" method.
  • 'N' - No. The contribution made by the employee is not subject to tax i.e. the contribution is deducted from Gross Pay before PAYE is calculated. This is the "Net Pay" method.
  • 'S' - Salary Sacrifice. The notional employee contribution is paid by the employer and is not subject to tax or NI. I.e. it is not included in taxable gross pay or earnings for NI purposes. This is the "Salary Sacrifice" method.

%

Is the Value, entered in the "%/Value" column to the right, a Percentage?

  • 'Y' - Yes, the value is a Percentage. Auto Enrolment schemes are typically a percentage.
  • 'N' - No, the value is an Actual Value.

%/Value

  • '%' - The percentage to deduct. For a 'Relief at Source' scheme the Employee Percentage should be reduced by 0.2% e.g. a 1% contribution should be entered as 0.8%. Do NOT reduce the Employer contribution.
  • 'Actual Value' - This is a default field which can be left blank. When you are linking a scheme to an employee you can amend the employer's contribution for an individual, if it differs from the default.
Click this link to check the definition of the type of scheme you are involved with Workplace pensions and tax relief. Queries regarding claiming tax back should be aimed at your Pension Provider.

Limits

Define the NI Limits to be applied to the Pensionable Gross if Percentage Calculations are to be used.

  • 'N' - Calculate the Pension on the Whole Pensionable Gross.
  • 'L' - Limited to the NI Lower Earnings Limit only.
  • 'U' - Limited to the NI Upper Earnings Limit only.
  • 'B' - Apply the percentage to pensionable gross between the NI Lower Earnings Limit and Upper Earnings Limit. Typically known as 'Qualifying Earnings'.
  • 'E' - Limited to the NI Upper Earnings Limit only (now same as 'U' but differed previously).
  • 'O' - Apply the percentage to pensionable gross between the NI Lower Earnings Limit and Upper Earnings Limit (now same as 'B' but differed previously). Typically known as 'Qualifying Earnings'.

Automatic Enrolment Scheme

If this is your Auto Enrolment scheme:

  • Enter the line number, as shown to the left of the scheme description, in "Automatic Enrolment Scheme".

Please make sure you have completed the Staging Date to activate Auto Enrolment.

If your staging date falls in the current Payroll Period please be aware the system may start making deductions immediately.

Allocating a Scheme to an Employee

To allocate an individual Pension Scheme to an employee, go to the [TAX, NI & Pension] page in the Employee record. You can amend the default Employee and Employer's contribution if necessary. You can also enter voluntary top up contributions for both the Employee and the Employer if applicable.

This is not necessary for Automatic Enrolment schemes. The system will set the scheme for you when the first period of enrolment is closed.

See also


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Keywords AND Misspellings
Pension, scheme, payroll, Parameters, auto enrolment, auto enrol, nest, royal london, now, people's pension, peoples pension
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