Gross (Net Pay Arrangement) deduction - based on Pensionable Earnings or Total Earnings
During payroll, a Gross (Net Pay Arrangement) pension deduction 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. HMRC call this method of deducting pension contributions “Net Pay Arrangement”.
A Pensionable Earnings or Total Earnings pension deduction is calculated as a percentage of earnings you specified when setting up the People’s Pension scheme. For example, this could be a percentage of Salary only or Salary plus bonus etc.
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Enter Default Percentage for the Employee and Employer Pension Deduction