Pension Schemes
Pensions Schemes
This is to prepare the Auto Enrolment pension schemes that you can then apply to the employee as required.
This is for Auto Enrolment pensions from NEST, NOW, Peoples Pension (PP) & Others
Lookup
Choose which pension you wish to work on.
Type
This must be:
AE Auto Enrollment
Description
This will display on the employees record.
Change the description to include the pension schemes providers name, This will then update the 'Lookup' when it is saved.
Payment.
There are 2 payments, Employee, Employer.
Each must be PERCENTAGE of their pensionable income.
Enter the rate to be deducted.
***Please note that if you also put a figure in the EMPLOYEE DETAILS section that rate will be used for that individual and it will still observe the pension scheme details.***
Full Tax Relief ie 'Net Pay Arrangement'
'Now', 'Creative Pension', 'SmartPension' use this method.
'Peoples Pension' can be setup to use this.
The pension contribution reduces the taxable pay. This allows automatic tax relief for basic and higher tax payers. Non tax payers do not get any tax relief, they would be better off with the 'relief at source' type scheme. HMRC Manuals
Basic Rate Tax Relief ie 'Relief at source'
The majority of pension providers use this method, ie 'Nest', 'Peoples Pension'.
The basic tax rate is taken off after tax, but the pension deduction is reduced by the basic tax rate.
The Effective Rate reflects this.
Assuming there is a National Insurance number then the Pension Provider reclaims the basic tax relief (20%) from HMRC. This means everybody gets at least basic tax relief, including NON tax payers. Higher paid employees will need to send in a Tax Assessment form to reclaim their higher rate tax relief.
HMRC Manuals
If you don't pay Income Tax.
Effective Rate
This shows the rate that will be actually deducted.
Example of Net Pay Arrangement and Relief at Source.
Calculate from Pensionable Income or Gross :
P If the pension is to be calculated from the elements of income that have been described as Pensionable in COMPANY Pay Headings
G If the pension is to be calculated from all of the GROSS income.
Gross income is defined as all the entries you put in the PAYsection of the Employee\EmployeeDetails\Pay
Restrict Pensionable Income to NIC Bands :
A for All income ie no restrictions.
N to use the current NIC Lower and Upper limits, this is currently the Qualifying Earnings.
Administrator
Enter the name of pension company who the scheme is with.
Admin Ref.
Enter the Administrators reference.
See Also Employee/EmployeeDetails/Pension , CalcPay/ProcessPayroll
re Nest.
Use Basic Rate Tax Relief, ie Relief at Source.
Nest Payment Source: What you have entered in Nest to call your payment, Nest defaults to 'My source'
EPSR is 'EMPnnnnnnnnn' where n is numeric numbers.
re Smart Pension.
Use Full Tax Relief.
Administrator: enter smartpension, notice no capitals or spaces.
EPSR is only the ref no, it does not include the name.
In 'EmployeeDetails/Pension/Group' the normal entry is 'default', note all lower case
pensionschemes 01/12/16
Created with the Personal Edition of HelpNDoc: Easy EPub and documentation editor