Net Pay Arrangement/Gross - based on Basic Pay or Total Earnings
During payroll, a Net Pay Arrangement pension is deducted from the employee’s pay after NI is calculated but before Tax is calculated. This means the employee’s Taxable Gross pay is reduced and the employee is due to pay less Tax from their pay.
The pension deduction is calculated as a percentage of earnings you specified when setting up the Now: Pensions scheme by choosing one of the following options:
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Basic Pay – the gross earnings of the employee, for example the employee’s salary. This doesn’t take into account any additional pay elements, such as overtime, bonuses, commission or shift premium pay.
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Total Earnings – the total pay due for the pay period before deductions. This includes any additional pay elements, such as overtime or bonuses.
Add Employee Pension Deduction
Add Employer Pension Deduction
Enter Default Percentage for the Employee and Employer Pension Deduction