How to set up a Nest pension scheme and contribution amounts in Sage Payroll.
In Sage Payroll, you can set up your Nest pension scheme and set your employee and employer contribution amounts.
These details must be identical to how your pension appears on your Nest portal.
If set up correctly, you can make online submissions directly to Nest. Alternatively, you can download the files ready to upload them to the Nest portal.
This will save you time, avoiding the need to type out any figures manually.
NOTE:
Once you create your pension scheme, you can edit but not delete it.
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 start
Before you can set up your pension scheme in Sage Payroll, you need certain information from Nest. You can find this by: You need the following information:
- Your employer Nest ID. Find out more about the employer Nest ID at nestpensions.org.uk
- 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
- 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 about aligning your worker group to tax periods at nestpensions.org.uk 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. ▼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 doesn’t 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 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 checkbox selected. You can check this in Settings and Payments and Deductions. ▼Qualifying earnings This includes all payments that have the Qualifying earnings checkbox selected. You can check this in Settings and Payments and Deductions. 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 checkbox.
- Select Save and repeat the process to add any more payment sources.
- Select the Qualifying Scheme checkbox.
- To read the terms, select the Our terms link. To accept them, select the Terms checkbox.
- Select Save.
NOTE:
Payroll will correctly calculate pre-tax and post tax deductions. You don't need to adjust the percentage amounts for a pre or post tax calcullation.
▼If you have Additional Voluntary Contributions (AVC)
▼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.
- Solution ID
- 222001000101451
- Last Modified Date
- Wed May 13 13:07:00 UTC 2026
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