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Salary Sacrifice Pensions - Re-invest NI savings to the employee's pension scheme

Created on  | Last modified on 

Summary

How to process National Insurance (NI) savings into an employee's pension scheme in Sage 50 Payroll.

Description

A salary sacrifice pension scheme deducts the pension contribution from the employee's gross pay, before tax or national insurance (NI) are calculated. This means that both you as the employer, and your employee could pay a lower amount of NI with this type of pension scheme.

Some pension providers allow the re-investment of the NI saving for employee and/or employer into the employee's pension scheme.

Resolution

Your software can't calculate this automatically, and you must calculate the contributions and amend this manually each period.

The steps you need to take depend on whether you're reinvesting the employee NI savings only, or both the employee and employer NI savings. Click the option you need below for a breakdown of the steps to follow.

 TIP: Ensure you keep clear notes of each value and what it is while you complete the relevant steps below.


Example

If you'd like to see how this may look for an employee, you can view an