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Changes to NHS Pensions bands applicable from 1 April 2023

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Summary

Details on the NHS pension band changes approved on 31 May 2023 in Sage 50 Payroll.

Description

On 31 May 2023, the Government approved changes to NHS Pension bands. These changes apply retrospectively from 1 April 2023

Resolution

The contribution rates remain the same for each tier, however the bands on each tier have increased. If you'd like to view the bands, use the options below. 


Software update

Sage 50 Payroll v29.01 is now available, and it includes the updated NHS pension salary bands. If you haven't installed this update yet, visit our guide to download and install Sage 50 Payroll v29.01.

After you install the update, you can use NHS Pension Tiers in each period you process to easily assess the recommended NHS pension tier for your employees. How do I process using the NHS Pensions Module? >

The software update can't correct prior periods if you processed employee's on what's now an incorrect tier. To find out more, including how to check your employees, continue to follow this guide.


How do the changes affect employees?

Because the bands have increased retrospectively, your employees may have overpaid contributions. 


What do I need to do?

Check your employees' contributions for pay runs from 1 April to date. If you find any employees you processed on a band that's no longer correct, you must correct this.

 NOTE: If all your employees stay on the same tier in each pay period despite the band changes, you don't need to complete any corrections. 

We've built a report that you can now download and run to check whether employees have new recommended tiers. Continue to the check previous contributions section to find out more and download the report.


Check previous contributions

Your software doesn't log which tier you processed employees on in prior periods. We've created a report that annualises your employees' pensionable pay in each pay period, and compares this to the salary bands on each tier.

The report confirms the recommended tier based on the original bands and the updated bands, and whether these match.

 CAUTION: If you didn't originally process an employee on the recommended tier, the report doesn't highlight this. 

Add the report to your software

  1. Click the link below to download the updated report.
    • Download the report >
       NOTE: If you're prompted to select where to save your download, select a location you can easily find, for example, the Window Desktop. 
  2. In Sage 50 Payroll, click Help then About.
  3. Click the link beside Reports directory.
  4. Double click the Userdef folder.
  5. Browse to your Downloads folder or the folder you selected to save the download, right-click NHS_Tiers_May_2023.report and click Copy.
  6. Right-click within your Userdef folder and click Paste.

The report is now ready to run in your software.

Run the report

When you check employee tiers, you must also check for any overpayments made by employees who've now left their employment. If any leavers have overpaid, you must still correct their contributions and pay any extra amount owed to them.

  1. On your employee list, highlight the employees who have contributed to your NHS pension scheme since 1 April 2023.
     NOTE: If leavers are hidden from your employee list click Criteria then untick Leavers, and if required Historical Leavers, then click OK.
  2. Click Reports, then click the User Defined (Local) folder on the left.
  3. Locate and run the NHS Tiers pre and post May 2023 report.
  4. In the Criteria Values window, set the date range as from 01/04/2023 to the most recent period you processed using the old bands.
  5. Click OK.

Correct previous contributions

If you find any employees overpaid in any prior periods, you must correct these.

Sage 50 Payroll can't automatically change pension contribution values for a prior period, or calculate these backdated amounts in a subsequent pay run.

If any employees have overpaid pension contributions, you must either:

  • Reprocess the relevant pay periods for any affected employees using the correct tier based on the new bands
  • Manually calculate the overpayment and apply this as an adjustment in the next period

Click the options below for the steps to compete each process.