Add a Nest pension scheme

You must have all the details of your scheme at hand. The pension will only calculate correctly if you’ve entered the correct information.

Before you can set up your pension scheme in Sage Payroll, you need certain information from Nest. You can find this by:

Checking your correspondence from Nest. View an example of a Nest letter
Logging into your Nest online account

You need the following information:

Your employer Nest ID. Find out more about the employer Nest ID
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 a fixed amount
The employee and employer contribution. This will be a percentage or fixed amount
The earnings basis. Whether it's based on unbanded earnings, banded earnings or custom earnings

NOTE: The earnings basis doesn’t apply for salary sacrifice pensions.

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

CAUTION: Your Nest group payment frequency must be either Tax weekly or Tax monthly. If it isn’t, you’ll have to set up a new group.

For more information read Align your worker group to tax periods, or contact NEST on 0300 020 0393.

▼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 must match the name of your group from Nest.
Type of contribution	Choose the type of contribution you have with Nest. ▼Salary sacrifice 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. ▼Contirbution 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 doesn’t pay tax on this contribution ▼Contirbution 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 isn’t 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 This includes all payments that have the Pension Earnings check box selected. You can check this in Settings and Payments and Deductions. ▼Qualifying earnings This includes all payments that have the Qualifying earnings check box selected. You can check this in Settings and Payments and Deductions. ▼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. Payroll only deducts contributions from earnings between the two bands. NOTE: These options aren’t 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)	Enrolling 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 must 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 don’t need to adjust the percentage amounts to allow for a pre or post tax calculation.

▼If you have Additional Voluntary Contributions (AVC)

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

This calculates 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

Payroll assesses any employees without an existing pension. The NEST scheme automatically applies when employees meet the criteria, otherwise you can opt them in if required.

For employees already enrolled on a pension, you’ll need to manually change to the new NEST scheme. For more information, read Adding a pension scheme to an employee.

If you have set up pensions as part of an FPS import, you can now continue with that process. For more information, read Import employees using an FPS file.

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