Add a Nest pension scheme

Before you can set up your pension scheme in Sage Payroll, you need certain information from Nest.

Correct information is crucial, to ensure accurate pension calculations for your employees.

You can find the information you need in 2 different ways.

Log into your Nest online account (opens in a new tab)

Check your letters from Nest. View an example of a Nest letter (opens in a new tab).

You'll need the following information:

Your employer Nest ID. Find out more about the employer Nest ID (opens in a new tab)
Details of your Nest groups
The type of contribution. Whether it's salary sacrifice, deducted before tax or deducted after tax

The type of deduction. Whether it's a percentage or fixed amount
The employee and employer contribution percentages or amounts
Your earnings basis. Whether it's based on unbanded earnings, banded earnings or custom earnings

NOTE: Earnings basis does not apply for salary sacrifice pensions.

Your contributions payment date. When you pay your pension contributions to Nest

After you've gathered all the information you need to set up your Nest pension, you can add it to Sage Payroll.

NOTE: You must ensure that your Nest group payment frequency is set to Tax periods. For example, Tax monthly instead of monthly.

Read the Nest article Align your worker group to tax periods (opens in new tab).

If you already set up your group without specifying tax monthly or tax weekly, you can't edit the setting. Set up a new group and transfer your employees into it.

If you have difficulty, please contact NEST to help you.

How to set up your Nest pension >

Select Pensions, then Add a new pension.
Select NEST Corporation.

In the Employer reference box, enter your employer Nest ID.

Select Add Group, and complete the relevant fields from the table.

Group name	Enter a name for this plan. This should match the name of your group from Nest.
Type of contribution	Choose the type of contribution you have with Nest. Salary sacrifice. Money paid into the pension deducts from your employee's gross pay. This deducts before calculating tax and National Insurance NOTE: With Salary sacrifice, enter the percentage contribution for the employer and employee. The employee contribution shows as a negative payment on the payslip. Contribution deducted before tax. Money paid into the pension deducts from your employee's gross pay. This deducts before calculating tax. Taxable gross pay reduces the amount of the pension contribution. This means the employee does not pay tax on this contribution Contribution deducted after tax. The money paid into the pension deducts after tax calculates. The pension provider claims back the tax paid on this contribution, direct from HMRC
Type of deduction	Choose whether the rates are a percentage of the employees’ pay or a fixed amount. NOTE: This option is not available for Salary sacrifice contributions
Employer Contribution	Enter the percent or fixed amount you pay into the pension scheme.
Employee Contribution	Enter the percent or fixed amount your employee pays into the pension scheme.

Select Next and complete the relevant fields from the table.

Earnings Basis	If you chose a percentage deduction, choose one of the following options: Pensionable Pay. Payments where you’ve selected the Pension Earnings check box Qualifying Earnings. Payments where you’ve selected the Qualifying Earnings check box Custom Earnings Basis. Enter your own thresholds for pension contributions. You can then enter an annual lower and upper earnings limit. When you process your pay run, Payroll adjusts the thresholds based on the pay frequency. Only deducts pension on earnings between the two bands NOTE: These options are not available for Salary sacrifice contributions.
Annual lower earnings limit (£)	This option only appears if you chose Custom Earnings Basis. Enter the annual lower earnings limit for your pension.
Annual upper earnings limit (£)	This option only appears if you chose Custom Earnings Basis. Enter the annual upper earnings limit for your pension.
Contributions payment date	Select the date you pay the pension contributions to your pension provider.
Default plan (optional)	Enroling employees into this pension scheme is automatic if you select this box. You can change this for individual employees when you process their pay run.

Select Save. Repeat the process to add more groups if required.
Select Add Payment Source, then enter a name for your payment source. This should match the name of your payment source from Nest.
If this is the default payment source, select the Default check box.
Select Save and repeat the process to add any more payment sources.
Select the Qualifying Scheme check box.
To read the terms, select the our terms link. To accept them, select the Terms check box.
Select Save.

NOTE: Payroll will correctly calculate pre-tax and post-tax deductions. You do not need to adjust the percentage amounts to allow for a pre or post tax calculation.

Additional Voluntary Contributions (AVC) >

Your employees can pay more into their pension scheme if they wish. This is called an Additional Voluntary Contribution (AVC).

This can be on done on an Ad-Hoc or regular basis. They can contribute a percentage or a fixed amount.

You don't have to create a new scheme for these employees.

You add the AVC into the employees record at the Edit pay screen of the payment run.

From the payment run Edit pay screen:

Select the employee.
Select Manage enrolment.
Select Manage contributions.
Change Deduct Additional Voluntary Contributions from Off to On.
Select the frequency of the Voluntary Contribution.
From Additional Voluntary Contribution type, select either:
- % of gross qualifying earnings
- % of pensionable earnings
- Fixed amount
Enter a value for the deduction.
Select Save.

Next steps >

If you can't find all your Nest information, you can contact them on 0300 020 0393.

If you already use Sage Payroll and have set up a new pension, you need to add your scheme to the employees.

If you have set up pensions as part of an FPS import, you can now continue the FPS import process.

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﻿Before you start >

How to set up your Nest pension >

Additional Voluntary Contributions (AVC) >

Next steps >

Before you start >