When an employee in an NHS pension scheme is on statutory leave: - Record their normal pensionable hours
- Use their NHS Pension tier based on their normal pay
- Calculate their employee pension contributions based on the actual pay received during their statutory leave
- Calculate their employer pension contributions based on their normal pay
SD55 report The SD55 report in your software only includes pension contribution values from tiered pension schemes. However, to process this scenario you use a non-tiered scheme. Due to this, the SD55 report shows £0 for employee and employer pension contributions when you run it for the affected employee. When you need a report with the employee's pension contributions, run the Pensions History report by selecting Reports then the Employee category.
1. Record normal pensionable hours You need to process the employee's normal pensionable hours during their leave. This lets your software include the correct pensionable hours on reports such as your SD55 annual return. When you do this, ensure the pensionable hours payment doesn't incorrectly increase the employee's pay. ▼ How to record pensionable hours Process the employee's full normal hours using the pay element you normally use that's included in Pensionable Hours. Also, enter the payment for their leave. Add a new pay element and configure it not to affect Pensionable Hours. Enter a negative value to this for the amount you've overpaid the employee. For example, if you're paying the leave only with no basic pay, 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 - Select Company then Pay Elements.
- Select the pay element used to process your employee's normal pay and click Edit.
- Note the settings of this pay element. Click OK, then click New.
- Enter the settings you noted in step 3 to the new payment, but clear the Pensionable Hours check box.
- Select OK, then OK again.
- Assign the new pay element to the employee.
- In Enter Payments, enter the required negative amount on the new payment.
2. NHS Pension tier When you assess the employee's NHS Pension Tier, you must manually check and assign the correct tier based on their normal pay. If you subscribe to the NHS Pensions module, you can view the tiers in your software by clicking Company, then NHS Pension Settings.
3. Pension contributions You must manually calculate and process the correct employer pension contributions. ▼ Find out how Employee contributions With the steps you've already completed above, your software already calculates the correct employee contribution.
Employer contributions Your software calculates a pension contribution based on the payments you've entered, even if they're lower than normal. You need to calculate how much the employer contribution is manually based on the employee's normal pay. Create and assign a new pension scheme, then enter the required extra employer contribution as a fixed amount. This way, the total employer pension contribution is correct based on the employee's normal pay. Create the scheme If you don't already have a pension scheme set up to process extra employer pension contributions, follow the set up a pension scheme article. Assign to employees Once your pension scheme is ready, assign it to the relevant employee. For help with doing this, follow the add a pension scheme to an employee's record article.
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: - Double-click the required employee and click the Pensions tab.
- Click Manage Schemes, select the new scheme then click Edit.
- Beside Employer Contributions, set the dropdown box to Fixed Amount.
- Enter the contribution amount in the box to the right of Fixed Amount.
4. When the employee's leave ends When your employee returns from statutory leave, remove any negative payments when you process their pay. Also, enter a leave date to the extra pension scheme to stop it from calculating further contributions. ▼ Enter a left scheme date - Double-click the required employee and click the Pensions tab.
- Click Manage Schemes, select the scheme used for the extra employer contribution and click Edit.
- 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.
|