You receive a warning when trying to enter the monthly
pension figures tothe Pension Agency website
(England and Wales).
This will happen if there are any employees on
SSP and/or SMP. This causes the figure for employees’ pensionable
pay to be less than the employer’s pensionable pay and this
difference confuses the checks made by the website. The Pension
Agency accept that IRIS GP Payroll
figures are correct and the warning can be ignored.
How do you collect pension contributions which have
been missed?
This could be a mistake or alternatively an employee has joined
the pension scheme and the Pension Agency has advised you that
contributions should be backdated, perhaps back to when the
employee joined the staff. Backdate payments for years other than
the current tax year cannot be processed through IRIS GP Payroll.
The employee should pay any contributions for previous years
directly to the Pension Agency and any tax allowance must be
negotiated with HMRC. For backdated contributions in the current
tax year, calculate the total salary (in previous months) on which
pension contributions should have been paid. Open the Pensionable
Pay window at the Temporary Adjustment Screen. Increase the
employee and employer pensionable pay to include the salaries which
should have been pensioned. The pension contributions in the
current month will then be based on the current month’s salary plus
the previous months’ salaries which require pension
contributions.
An employee has opted to pay for added years. The
Agency have instructed you to charge an extra
percentage each month, but this is to start on the
employee’s birthday in the middle of a month. How is this
calculation done for the short
month?
Count the number of days from the birthday to
the end of the month and calculate this as a fraction of the days
in the month (i.e. divide by 30 or 31). Apply this fraction to the
percentage to be added for added years and use this figure for the
first month. For example, if the percentage for added years is 9%
and the employee’s birthday is 20th January. The number of days to
be paid in January is 12. This is 12/31 of a full month. Calculate
12/31 of 9% which equals 3.48%.
Enter 3.48% into the Extra rate for added
years field and calculate the payrun. Change this setting to
9% for February and subsequent months.
An employee has opted to pay for added
years. The Agency has instructed you to backdate
the extra contributions to her birthday several months earlier. How
is this entered?
Calculate the salary from the birthday to the
present, including the current month’s salary. Apply the percentage
for extra years to obtain the added years payment due to the end of
the current month. Calculate this figure as a percentage of the
current month salary and use this figure for the extra percentage
this month. For example, the current month’s salary is £1000, the
added years’ percentage is to be 9% and this is to apply to back
salary of £1500. The total salary liable to extra contributions at
the end of the current month is £2500. The extra contributions
would be 9% of £2500 which is £225. £225 as a percentage of the
current month’s salary is 225/1000 x 100 which is 22.5%. Enter
22.5% into the Extra rate for added years field
and calculate the payrun. Change this setting to 9% for subsequent
months.
