Gross (Net Pay Arrangement) pension - based on Qualifying 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 Qualifying Earnings pension deduction is calculated as a percentage of the employee’s Qualifying Earnings between the lower limit and upper limit.
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Enter Default Percentage for the Employee and Employer Pension Deduction