Process the employee's full normal hours using the pay element you normally use that's included in Pensionable Hours. As well as this, enter the payment for their leave.

Then, add a new pay element that isn't included in Pensionable Hours. Enter a negative value to this for the amount you've overpaid the employee. For example, if you're not paying them any basic pay and are paying the leave only, enter the full value of the employee's normal hours.

You've now reduced their net amount to the correct value, while recording the employee's normal Pensionable Hours in your software.

Set up and process the payments

1. Select Company then Pay Elements.
2. Select the pay element used to process your employee's normal pay and click Edit.
3. Note the settings of this pay element. Click OK, then click New.
4. Enter the settings you noted in step 3 to the new payment, but clear the Pensionable Hours check box.
5. Select OK, then OK again. 
6. Assign the new pay element to the employee.
7. In Enter Payments, enter the required negative amount on the new payment.

Employee contributions

With the steps you've already completed in this guide, your software already calculates the correct employee contribution based on what they are actually paid.

---

Employer contributions

Your software calculates the employer contribution based on what is actually paid. You must manually calculate how much more the employer contribution must be based on the employee's normal pay. You then need to create and assign a new pension scheme, then enter the required extra employer contribution as a fixed amount.

Create the scheme

If you don't already have a pension scheme set up to process extra employer pension contributions, you can use our handy guide to create one - how do I set up a pension scheme?

Assign to employees

Once your pension scheme is ready, you can assign the scheme to the relevant employee by following our guide to add a pension scheme to an employee's record.

Calculate the extra contributions due

You must manually calculate the full value of the employer contribution due based on the employee's normal salary. Next, subtract the employer contribution that payroll has already calculated to find out the shortfall you need to process.

You can then enter the extra amount you've calculated to the new pension scheme:

1. Double click the required employee and click the Pensions tab.
2. Click Manage Schemes, select the new scheme then click Edit.
3. Beside Employer Contributions, set the dropdown box to Fixed Amount.
4. Enter the contribution amount in the box to the right of Fixed Amount.

1. Double click the required employee and click the Pensions tab.
2. Click Manage Schemes, select the scheme used for the extra employer contribution and click Edit.
3. In the Left Scheme box, enter the last date of the last tax period you processed for this employee.

You can now process payroll for this employee as normal.