Employee Net Contribution - based on Qualifying Earnings
An employee net contribution pension deduction is deducted from the employee’s pay after Tax and NI is calculated, then the employee receives basic rate tax relief on that pension deduction. Higher rate tax payers need to claim the remaining tax relief from HMRC. This method of deducting pension contributions HMRC call relief at source (RAS).
In payroll, if say the employee’s pension deduction is 1%, you would enter 1% in the employee’s pension contribution standard value but the actual deduction will be 0.8% from their pay.
A Qualifying Earnings pension deduction is calculated as a percentage of the employee’s Qualifying Earnings between the lower limit and upper limit.
Add Employee Pension Deduction
Add Employer Pension Deduction
Enter Default Percentage for the Employee and Employer Pension Deduction: