How to complete your payment file

Welcome to this quick tip video on how to complete your payment file, if your scheme uses tax relief at source.

Let’s go through some of the columns to see what they mean.

First, let’s look at the Pensionable Pay definition.

Pensionable pay is the part of the employee’s salary that you base the contributions on.

This should be a minimum of Qualifying Band Earnings, or a definition you’ve self-certified. For more details on Pensionable Pay definitions, please go to the Pension regulator’s website.

Next, we have the regular payment columns. We’re looking for monetary amounts in these columns.

For the employer column, we need the gross amount. That’s the entire amount paid into the pension by you as the employer.

For the employee column, we need the net amount. That’s the amount paid by the employee that’s actually been deducted from their salary. We’ll then add tax relief to this, so a higher amount will go into their pension.

Moving along to the percentage columns, these should reflect the gross amounts for both contributions.

For example, you as the employer might pay a 6% contribution, and your employee’s contribution might be 5%. The 5% in this example includes the tax relief so you don’t need to reduce it to reflect what you actually deducted from your employee’s salary.

So in this example the employee has paid £80 Net and once we add the tax relief this would be £100. So the EE % would be 5% of the pay period earnings of £2000.

We’ll check that these figures meet the minimums and tie up with each other.

That’s it – thanks for watching.