CAUTION: If you're not certain whether you need to process a pension PAYE scheme, check with HMRC. Don't enable the Pension PAYE option in an existing Sage 50 Payroll company unless you're certain you should. 

Information

If you operate a pension payroll scheme, to ensure you report the correct information in the FPS, Sage 50 Payroll supports the following types of pension payment:

• Trivial commutation
• Flexi-access drawdown
• Death benefit
• Serious ill-health
• Pension commencement excess lump sum
• Stand alone lump sum

If applicable, you can also indicate if a payment is for a one-off uncrystallised funds pension lump sum (UFPLS) that clears the pension pot.

We're unable to offer advice on which pension payment type you should be making. If you're unsure of the type of pension payment you need to make, you must speak to your pension provider.

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Enable the pension PAYE scheme options

The following steps explain how to enable the pension PAYE scheme options and set up your pay elements.

1. Click Company then click Settings.
2. Select the This is a pension PAYE scheme check box.
3. Click OK.

This enables the pension PAYE scheme functionality and you can now set up any relevant pay elements.

You can disable this functionality by clearing the check box again. However, if you have pay elements set up to use these pension PAYE scheme options, you must delete them first before you can clear the check box.

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Set up your pay elements

You can either set up new pay elements to account for the pension PAYE scheme payments, or edit existing ones.

1. Click Company then click Pay Elements.
2. To create a new pay element, click New. To amend an existing pay element, select the relevant payment then click Edit.
3. From the new Payment Type drop-down menu, select one of the following pension PAYE types:
    TIP: If the Status is set to Factor, the Payment Type drop-down box isn't available. 
   

   Trivial Commutation	If you select this option, you see an additional drop-down box called Trivial Reason. From this box, you must choose one of the following reasons: Trivial commutation lump sum Other lump sum (personal/non-occupational pension scheme) Other lump sum (occupational/public service pension scheme)
   Flexible Pension	Select this option to use the pay element for a flexi-access drawdown payment type.
   Death benefit	Select this option to use the pay element for a death benefit payment type.
   Serious Ill-Health	Choose this option to use the pay element for a serious ill-health payment type.
   Pension commencement excess lump sum	Select this option to use the pay element for a pension commencement excess lump sum payment type.
   Stand alone lump sum	Select this option to use the pay element for a stand alone lump sum payment type.

4. If the pay element is not subject to tax, clear the PAYE check box.
5. If the pay element is for a UFPLS payment, select the Uncrystallised Funds check box.
6.  NOTE: This tick box does not affect any calculations in Payroll. It adds an indicator to the element in the background of the FPS. 
7. If required, enter additional details, for example default hours and rate.
8. Click OK then click OK.

Repeat these steps for any additional pay elements you want to set up. You can now assign the pay element to the relevant employees using Global changes: Payments.

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