When an employee receives statutory parental or sick pay, you may need to change their employer pension contribution.

In most cases, you need to pay employer pension contributions based on their full salary, and not on the value of their statutory payments. 

You need to calculate and process this manually.

You determine what qualifies as 'normal' pay. This is why Sage Payroll can't automatically calculate the employer pension amount for you.

 NOTE: This doesn't effect the employee amount. It's the employees' choice what they contribute. 

You must consider your company policy or the employee's contract when working out the contribution amount.

Some pension schemes require the employer to cover the employee's pension contribution during the period they're on leave.

 NOTE: If you're unsure how this affects your pension scheme, contact your pension provider or ACAS for advice before you process.  

Calculate the contribution

You may be able to use previous pay runs and payslips to help you get the figure. Look for a period where the employee received a normal pay and note the employer pension contribution.

 NOTE: It is still your responsibility to ensure this is correct. 

If you need to manually work out the contribution you need to consider your pension scheme settings, the employee's pay and their contribution rates.

If you're not certain of the employee pay amount to use in the calculation, contact your pension provider for advice.

Salary sacrifice pensions 

If your employee is on a salary sacrifice scheme you are obliged to continue the full employer contribution for the whole leave.

As all pension contributions in a salary sacrifice scheme are calssed as employer contributions, you must pay these. 

Process the contribution

When you've calculated the required contribution, enter it in the pay run.

Next steps

When the employee returns to work and you pay their normal wages, you must change their contribution rates back to the correct amounts.