How do I set up a pension scheme in Platinum Payroll?

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, for the 2019-2020 tax year ending on the 5th April 2020 the Employee Percentage should be reduced by '0.2%', e.g. a '5%' contribution should be entered as '4%'. This takes account of the 20% tax relief on the employee contribution that the pension company will claim from the government.

For a 'Nett Pay' scheme, for the 2019-2020 tax year ending on the 5th April 2020 the Employee Percentage should be set at '5%'.

For the 2019-2020 tax year the Employer contribution should be set to '3%'.

• '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".

• Enter your "Staging Date". This is the date from which your new duties as an employer began. You must enter this date to activate Auto Enrolment within Platinum.

Please note your re-enrolment date will be based on this date so please ensure it is accurate.

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.

Increasing Automatic Enrolment Contributions (6th April 2019)

The minimum contributions that employers and employees will pay into automatic enrolment workplace pension schemes are increasing from 6th April 2019.

When you have moved into the tax year 2019-2020 please follow these steps to update the percentage to apply to your auto enrolment scheme.

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

• Move down to the relevant scheme.
• Press <Enter> to move across to the "%/Value" column.
• Overtype the percentage with the updated percentage to apply to your scheme.

• For a 'Relief at Source' scheme :
  • The Employee Percentage should be increased to '4%'. This allows for 20% tax relief on a '5%' contribution.
  • The Employer contribution should be increased to '3%'.

• For a 'Nett Pay' scheme:
  • The Employee Percentage should increased to a '5%' contribution.
  • The Employer contribution should be increased to '3%'.

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

See also

• How do I Prepare for Automatic Enrolment?
• How do I Add Pension Company Details to my Pension Letters?
• How do I Edit my Auto Enrolment Letters?
• Links to Pension Providers

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