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No option to deduct employer pension from post-sacrifice pay

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Summary

How to deduct employer pension from post-sacrifice pay, for example after Cycle to Work or Childcare Vouchers, in Sage 50 Payroll.

Description

Some pension providers let you choose whether employer contributions are based on employees' pre or post salary sacrifice pay when you set up your scheme.

Sage 50 Payroll calculates employer pension contributions before deducting salary sacrifice deductions from employees' pensionable pay. If your employer contributions are based on employees' post sacrifice pay, follow the workaround below. 

 NOTE: Your software calculates salary sacrifice pension schemes before other salary sacrifice deductions, for example cycle to work. 

Resolution

Workarounds

You can either use a negative payment, or enter pension contributions manually. Select the option below that you'd like to find out about:

▼ Negative payment

Instead of using a salary sacrifice deduction, for example for a cycle to work scheme, you can process a negative value on a pay element.

Set the pay element as pre-tax, pre-NI, and subject to pension contributions.

  1. Select Company, then Pay Elements.
  2. Go to the Payments tab, then select New.
  3. Enter a description for the payment, for example, Salary Sacrifice.
  4. Select the Pension (Main) and Pension (AVC) check boxes.
  5. Select the check box beside Salary Sacrifice (Pension Only).
  6. Select the Qualifying Earnings check box, then select click OK.
  7. Click OK again, then select Employee.
  8. Click Employee Record, then go to the Employment tab.
  9. Click Pay Elements, then Payments.
  10. Select the salary sacrifice payment you've created, then click Save.
  11. Click Save, then Close.
  12. Click Payroll, then Enter Payments.
  13. On the salary sacrifice payment, set Hours/No as 1.0000 and set the Rate as the negative value required, for example, -243.00.
  14. Continue to process payroll as normal.

With this option, your software calculates the correct contributions, based on the negative payment you process. 

▼ Calculate and process pension contributions manually

With this option, you calculate and process the employer contributions manually for the pension scheme.

First, you need to calculate the employer pension contribution manually, outside your software. When you have this, follow the steps below to process it. 

 NOTE: With this option, you need to check the pension contributions are correct each period, and amend them if not. 

  1. Click Company, then click Pension Schemes.
  2. Select the required pension scheme, then click Edit.
  3. Click Employer, then set the contribution details to Fixed Amount and 0.00.
  4. Click OK, then click Close.
  5. Click Payroll, then click Enter Payments.
  6. Click the Employer's button, then in Employer Pension field enter the required value.
  7. Click OK.
  8. Continue to process payroll as normal.