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

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{{Update}}
 
 
== 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 {{Menu|{{PR}}|Payroll Parameters/Maintenance|Company Parameters|Period Adjustments}}.
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Go to {{Menu|{{PlatinumModuleSettings}}|{{PR}}|Module Settings}}
 +
* Scroll down to the {{DataPrompt|Pension Schemes}} section.
  
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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.
 +
* Whether it is a {{DataValue|Relief at Source - Net Contributions}} or {{DataValue|Nett Pay - Gross Contributions}} scheme.
 +
* Whether the settings differ for Employee and Employer.
  
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==== Tax ====
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==== Pension Details ====
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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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For each applicable pension scheme, complete the relevant information.
  
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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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Click on {{DataPrompt|Pension Description}} then click {{Button|Edit}}.
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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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* Enter the name of the scheme, max 15 characters, e.g. {{DataValue|NEST}}
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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 {{Button|Done}}.
  
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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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Click on {{DataPrompt|Employee percentage}} then click {{Button|Edit}}.
 +
* Specify if the employee deduction will be a percentage ({{DataValue|Y}}) or specified amount ({{DataValue|N}}).
 +
* Click {{Button|Done}}.
  
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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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Click on {{DataPrompt|Employee amount}} then click {{Button|Edit}}.
 +
* Depending on your choice for the previous flag enter the employee deduction.
  
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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.}}
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{{Information|text=For a {{DataValue|Relief at Source}} scheme, for the 2022-2023 tax year ending on the 5th April 2022 the Employee Percentage remains at {{DataValue|4%}}. This takes account of the 20% tax relief on the employee contribution that the pension company will claim from the government which makes up the balance of the 5% Employee contribution.}}
  
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==== % ====
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{{Information|text=For a {{DataValue|Nett Pay}} scheme, for the 2022-2023 tax year ending on the 5th April 2021 the Employee Percentage remains at {{DataValue|5%}}.}}
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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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* Click {{Button|Done}}.
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* {{DataValue|N}} - No, the value is an Actual Value.  
 
  
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==== %/Value ====
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Click on {{DataPrompt|Employee limit}} then click {{Button|Edit}}.
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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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* Select the NI Limit to apply to the scheme.
 +
** {{DataValue|None}} - Calculate the pension on the whole pensionable gross.
 +
** {{DataValue|NI Lower Earnings}} - Apply the NI Lower Earnings Limits (2022/2023 rates)
 +
** {{DataValue|NI Upper Earnings}} - Apply the NI Upper Earnings Limits (2022/2023 rates)
 +
** {{DataValue|NI Both}} - NI Qualifying Earnings i.e. NI Upper & Lower Earnings Limits (2022/2023 rates)
 +
** {{DataValue|DWP Lower Earnings}} - Apply the DWP Lower Earnings Limits (2022/2023 rates)
 +
** {{DataValue|DWP Upper Earnings}} - Apply the DWP Upper Earnings Limits (2022/2023 rates)
 +
** {{DataValue|DWP Both}} - DWP Qualifying Earnings i.e. DWP Upper & Lower Earnings Limits (2022/2023 rates)
  
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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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* Click {{Button|Done}}.
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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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Click on {{DataPrompt|Employer percentage}} then click {{Button|Edit}}.
 +
* Specify if the employer deduction will be a percentage ({{DataValue|Y}}) or specified amount ({{DataValue|N}}).
 +
* Click {{Button|Done}}.
  
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==== Limits ====
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Click on {{DataPrompt|Employer amount}} then click {{Button|Edit}}.
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Define the NI Limits to be applied to the Pensionable Gross if Percentage Calculations are to be used.  
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* Depending on your choice for the previous flag enter the employer deduction.
  
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* {{DataValue|N}} - Calculate the Pension on the Whole Pensionable Gross.
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{{Information|text=For the 2022-2023 tax year the Employer contribution remains at {{DataValue|3%}}.}}
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* {{DataValue|L}} - Limited to the NI Lower Earnings Limit only.
 
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* {{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|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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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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* Click {{Button|Done}}.
 +
 
 +
Click on {{DataPrompt|Employer limit}} then click {{Button|Edit}}.
 +
* Select the NI Limit to apply to the scheme.
 +
** {{DataValue|None}} - Calculate the pension on the whole pensionable gross.
 +
** {{DataValue|NI Lower Earnings}} - Apply the NI Lower Earnings Limits
 +
** {{DataValue|NI Upper Earnings}} - Apply the NI Upper Earnings Limits
 +
** {{DataValue|NI Both}} - NI Qualifying Earnings i.e. NI Upper & Lower Earnings Limits
 +
** {{DataValue|DWP Lower Earnings}} - Apply the DWP Lower Earnings Limits
 +
** {{DataValue|DWP Upper Earnings}} - Apply the DWP Upper Earnings Limits
 +
** {{DataValue|DWP Both}} - DWP Qualifying Earnings i.e. DWP Upper & Lower Earnings Limits
 +
 
 +
* Click {{Button|Done}}.
 +
 
 +
Click on {{DataPrompt|Tax relief}}
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* Select the type of scheme and click {{Button|Done}}.
 +
 
 +
{{Information|text=Click this link to check the definition of the type of scheme you are involved with [https://www.thepensionsregulator.gov.uk/en/employers?gclid=EAIaIQobChMIm4fu9Lmd4QIVb77tCh2BuQu_EAAYASAAEgLB__D_BwE Workplace pensions and tax relief]. Queries regarding claiming tax back should be aimed at your Pension Provider.}}
 +
 
 +
{{Warning|text=You '''must''' ensure you check your settings and seek clarification from your pension provider and/or accountant if you are unsure of the type of scheme you have enrolled in.}}
 +
 
 +
== Automatic Enrolment Scheme ==
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* Select {{DataPrompt|Automatic Enrolment Scheme}} and click {{Button|Edit}}.
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* Choose the number of the scheme then click {{Button|Done}}.
 +
 
 +
== Employer's Duty Start Date (Staging Date) ==
 +
If not already specified, select this option and enter the date your company joined automatic enrolment.
 +
* Click {{Button|Done}}.
 +
 
 +
{{Information|text=Please note your re-enrolment date will be based on this date so please ensure it is accurate.}}
 +
 
 +
* To save your settings click {{Button|Done}} and {{Button|Accept}}.
 +
 
 +
== Allocating a Scheme to an Employee ==
 +
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.
 +
 
 +
{{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.}}
 +
 
 +
For advice or clarification of auto enrolment schemes please speak to your pension provider or view [https://www.thepensionsregulator.gov.uk/en/employers/managing-a-scheme/contributions-and-funding The Pensions Regulator] for advice.
  
 
== See also ==
 
== See also ==
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* [[How do I Prepare for Automatic Enrolment?]]
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* [[How do I prepare for automatic enrolment?]]
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* [[How do I Add Pension Company Details to my Pension Letters?]]
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* [[How do I add pension company details to my pension letters?]]
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* [[How do I Edit my Auto Enrolment Letters?]]
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* [[How do I edit my auto enrolment letters?]]
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* [[Links to Pension Providers]]
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* [[Links to pension providers]]
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* [[How do I Run a Payroll Period?]]
 
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* [[How do I Add a New Employee to the Payroll?]]
 
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{{KB_Tags|Pension, scheme, payroll, Parameters, auto enrolment, auto enrol, nest, royal london, now, people's pension, peoples pension}}
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{{KB_Tags|pension, scheme, payroll, parameters, auto enrolment, auto enrol, nest, royal london, now, people's pension, peoples pension, increase, phasing, update}}
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{{KB_PR}} {{ZN_Admin}}
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{{How}}{{KB_PR}}{{ZN_Admin}}

Latest revision as of 15:07, 3 May 2022

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 " " Reports & Settings Maintenance Options System Administrator Module Settings" Payroll Module Settings"

  • Scroll down to the "Pension Schemes" section.

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

For each applicable pension scheme, complete the relevant information.

Click on "Pension Description" then click [Edit].

  • Enter the name of the scheme, max 15 characters, e.g. 'NEST'
  • Click [Done].

Click on "Employee percentage" then click [Edit].

  • Specify if the employee deduction will be a percentage ('Y') or specified amount ('N').
  • Click [Done].

Click on "Employee amount" then click [Edit].

  • Depending on your choice for the previous flag enter the employee deduction.
For a 'Relief at Source' scheme, for the 2022-2023 tax year ending on the 5th April 2022 the Employee Percentage remains at '4%'. This takes account of the 20% tax relief on the employee contribution that the pension company will claim from the government which makes up the balance of the 5% Employee contribution.
For a 'Nett Pay' scheme, for the 2022-2023 tax year ending on the 5th April 2021 the Employee Percentage remains at '5%'.
  • Click [Done].

Click on "Employee limit" then click [Edit].

  • Select the NI Limit to apply to the scheme.
    • 'None' - Calculate the pension on the whole pensionable gross.
    • 'NI Lower Earnings' - Apply the NI Lower Earnings Limits (2022/2023 rates)
    • 'NI Upper Earnings' - Apply the NI Upper Earnings Limits (2022/2023 rates)
    • 'NI Both' - NI Qualifying Earnings i.e. NI Upper & Lower Earnings Limits (2022/2023 rates)
    • 'DWP Lower Earnings' - Apply the DWP Lower Earnings Limits (2022/2023 rates)
    • 'DWP Upper Earnings' - Apply the DWP Upper Earnings Limits (2022/2023 rates)
    • 'DWP Both' - DWP Qualifying Earnings i.e. DWP Upper & Lower Earnings Limits (2022/2023 rates)
  • Click [Done].

Click on "Employer percentage" then click [Edit].

  • Specify if the employer deduction will be a percentage ('Y') or specified amount ('N').
  • Click [Done].

Click on "Employer amount" then click [Edit].

  • Depending on your choice for the previous flag enter the employer deduction.
For the 2022-2023 tax year the Employer contribution remains at '3%'.
  • Click [Done].

Click on "Employer limit" then click [Edit].

  • Select the NI Limit to apply to the scheme.
    • 'None' - Calculate the pension on the whole pensionable gross.
    • 'NI Lower Earnings' - Apply the NI Lower Earnings Limits
    • 'NI Upper Earnings' - Apply the NI Upper Earnings Limits
    • 'NI Both' - NI Qualifying Earnings i.e. NI Upper & Lower Earnings Limits
    • 'DWP Lower Earnings' - Apply the DWP Lower Earnings Limits
    • 'DWP Upper Earnings' - Apply the DWP Upper Earnings Limits
    • 'DWP Both' - DWP Qualifying Earnings i.e. DWP Upper & Lower Earnings Limits
  • Click [Done].

Click on "Tax relief"

  • Select the type of scheme and click [Done].
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.
You must ensure you check your settings and seek clarification from your pension provider and/or accountant if you are unsure of the type of scheme you have enrolled in.

Automatic Enrolment Scheme

  • Select "Automatic Enrolment Scheme" and click [Edit].
  • Choose the number of the scheme then click [Done].

Employer's Duty Start Date (Staging Date)

If not already specified, select this option and enter the date your company joined automatic enrolment.

  • Click [Done].
Please note your re-enrolment date will be based on this date so please ensure it is accurate.
  • To save your settings click [Done] and [Accept].

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.

For advice or clarification of auto enrolment schemes please speak to your pension provider or view The Pensions Regulator for advice.

See also


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