When you submit under Real Time Information (RTI) a Payroll ID is included for each employee. The Payroll ID uniquely identifies your employee’s employment.

When an employee retires and they're due to be paid a pension from the employer, a new Payroll ID must be used and details of this change should be submitted to HMRC on the first Full Payment Submission (FPS) containing the pension payment.

If an employee is continuing in employment and is to be paid pension by the same employer, a separate employee record must be created with a tax code of 0T on a week 1/month 1 basis to process the pension payments. For more information, please refer to the HMRC website.

In Sage 50 Payroll when the employee leaves, you need to mark the employee as a leaver. Their leaver details are then submitted to HMRC when you submit your FPS. You should then create a new employee record for the pension employment, using the P46 Pension starter form. This assigns a new Payroll ID for this employee, and marks the employee’s employment type as a pension employment.

When you submit your first FPS containing the new pension employment, Sage Payroll submits the new Payroll ID and that it’s a pension employment, however it doesn't submit the old Payroll ID. HMRC use the employees national insurance number to identify that it’s the same employee with two employments.

For more information about how to mark an employee as a leaver and create new employee records, please refer to the following articles:

• Sage 50 Payroll - Processing leavers
• Sage 50 Payroll - Adding new employees
• Sage Instant Payroll - Processing leavers
• Sage Instant Payroll - Adding new employees