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How to manually process a pension refund through enter payments

Created on  | Last modified on 

Summary

Process a pension refund using Enter Payments in Sage 50 Payroll.

Description

There may be times when you need to refund pension contributions manually. For example, if an opt out has been processed but the refund wasn't paid at the time.

Let's look at the steps now.

Resolution

Check the employee's pension scheme settings

During the steps below you may need to set up a pay element that's pre or post tax or NI, depending on how your pension scheme works. When you reach this step, if you'd like help to create this pay element visit our guide on how to set up pre and post tax and NI pay elements >
  1. Click Company, then click Pension Schemes.
  2. Select the pension scheme assigned to the relevant employee, then click Edit.
  3. Click OK on the message that appears.
  4. On the Details tab of the pension scheme, check for the following:
    • If the Salary Sacrifice check box is selected, the pension was deducted before tax and national insurance (NI). To refund this, set up a pre tax, pre NI payment. If this box is clear, continue to step 5
  5. Click the Employee tab of the pension scheme, under the Settings section check for the following:
    • If the Deduct Before Tax check box is selected, the employee's pension contribution deducts before tax and after NI calculates. To refund this, set up a pre tax, post NI payment
    • If the Deduct Before Tax check box is clear, the employee's pension contribution deducts after tax and after NI calculates. To refund this, you must set up a post tax, post NI payment
Process the refund with the correct pay element, then complete the section below.

Clear the pension YTD information

The steps you need to follow depend on whether the employee has more than one pension scheme assigned. 

If it's the employee's only pension scheme:

  1. Double-click the relevant employee on your employee list, then click the Employment tab.
  2. Click YTD Values, then click Other YTD.
  3. Find the Pension heading, then clear the values in the pension boxes beneath.
     NOTE: Don't clear any values under the Other heading, as they don't relate to pensions. 
  4. Click Save, then click Close.

If the employee has multiple pension schemes assigned:

  1. Double-click the relevant employee on your employee list, then click the Employment tab.
  2. Click YTD Values, then click Pension.
  3. Clear the values from the row for the relevant pension scheme, then click OK.
  4. Click Save, then click Close.

You've now processed the refund and the year to date values no longer appear on any payslips or reports.