Pension Contributions

Question asked by Rob Wilde 7 years ago

Can someone have a quick look at the following for me with regards pension contributions.

I have two individuals who are paid weekly at agreed hours and hourly rate.

Their company have decided to contribute to a NEST pension scheme, themselves contributing 1%, and the company contributing 1%.

The staging date was 1st May 2017, but they only agreed to start contributing last week, so I have put thay the joining date as 9th May 2017.

I was expecting for employee 1 a figure of £5.00 to be their pension contribution (1% of £500). The figure that came out was £ 1.11.

Can anybody explain to me why it has only taken £1.11 from employee 1 and not the £5.00 I was expecting?

Cheers in advance

Rob

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3 Replies

Hi,

Yes this can be changed. You would first of all need to set up a new pension with the 'apply contributions to all pensionable pay' option selected.

The employee details would need to be linked to this new pension scheme instead of the old banded qualifying earnings scheme.

Any already processed payroll with pension contributions would then need to be re-processed.

Best answer
7 years ago

Hi Rob,

Entering in a joining date part way through the payroll period will pro-rata the pension calculation during that period. Based on what you've said this should not be to the extent where the contribution is so low though (£1.11).

A contributing factor could be the pension scheme the company is using, i.e. if using 'banded qualifying earnings' then the first £5,824 of pay is not subject to pension. This is not an up front threshold so will be split amongst the weeks in the tax year.

If you would like us to look into the issue for you then please email details of the business over to contact support.

Thanks,

Michael

7 years ago

Can I change the band then so that they pay the percentage on the full gross pay ? So I would still want 'Net pay arrangement' , pension contribution taken before the calculation of tax , but the 'Earnings basis' would be contributions calculated from all earnings from the first £1.00?

7 years ago

Hi,

Yes this can be changed. You would first of all need to set up a new pension with the 'apply contributions to all pensionable pay' option selected.

The employee details would need to be linked to this new pension scheme instead of the old banded qualifying earnings scheme.

Any already processed payroll with pension contributions would then need to be re-processed.

Best answer
7 years ago

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