Set up and manage workplace pensions in QuickBooks Online Payroll

Before you begin, gather the following information:

• Pension provider name and reference number
• Employer and employee contribution amounts

Note: Smart pensions is only available for customers with Payroll Elite or Premium.

If you're not sure which Payroll plan you have, sign in to QuickBooks your account to check:

1. Go to Settings and select Subscriptions and billing.
2. The name of your payroll plan is in the second box.

Step 1: Choose a workplace pension start date

1. Select the gear icon, and then select Payroll settings.
2. Next to Workplace pensions, select the pencil icon.
3. Select the calendar icon to choose your start date.
   If you don't have a start date, tick I don't have a start date.
4. If you'd like to choose your own re-enrolment date, select Do you want to re-enrol your employees automatically and enter the date.
5. Select Save, and then Done.

Step 2: Set up a pension scheme

1. Next to Pension schemes, select the pencil icon.
2. Select Add a company pension.
3. Select your pension provider from the dropdown. If you can't see it on the list, select Other.
4. Enter the following details:
   • Pension name–this will show next to the pension amount on the employee's payslip.
   • Provider reference number. This is your unique employer reference. If you use Smart Pension, ensure this matches your Company ID, which can be found in your Smart Pension dashboard.
   • Group name–use this if you have many employees and want to categorise them.
5. To auto enrol employees in the pension, select Use earnings thresholds and use the latest defined thresholds.
6. Select the taxation method.
7. Select Save.

Step 3: Configure pension pay types

1. Select the gear icon, then Payroll settings.
2. Next to Pay types, select Pension pay types.
3. Add or exclude pensionable earnings (e.g., bonus, overtime) according to your pension provider’s guidance.

Step 4: Notify employees

You must inform your employees about their pension enrolment within six weeks of your duty start date as an employer. Some pension providers handle communication on your behalf.

If not, use The Pensions Regulator’s letter template.

Step 5: Enrol employees in the pension scheme

Now, it's time to enrol eligible employees into the pension scheme. Find out if an employee is eligible.

1. Follow this link to complete the steps in product
2. Select an employee.
3. Next to Workplace pension, loan & other deductions, click the pencil icon.
4. Select Set up workplace pension.
5. Choose the worker category and applicable setting.
6. Select the pension provider or add a new one.
7. Enter the employer and employee contribution amounts.
8. Select Save.

If you've chosen Nest or Smart Pension as your pension provider, you can use automatic submissions in QuickBooks Online Payroll to streamline your processes and ensure contributions are sent on time.

Before you begin

Ensure you meet these requirements for a successful automated submission:

• Set up your workplace pension in QuickBooks Online Payroll following the standard setup steps.
• Ensure all employees are enrolled and registered with your provider (Nest or Smart Pension).
• Check that employee details—such as National Insurance numbers, names, and payroll IDs—match exactly between QuickBooks and your pension provider.
• Verify that your payroll schedules (e.g., monthly or weekly) and contribution amounts are identical in both systems.
• For Smart Pension users: When adding the provider, you must enter your Company ID into the Provider Reference field. You can find this ID in your Smart Pension portal under Menu or Key Information.

Turn on automatic submissions

Important notes:

• If you have newly enrolled employees, you'll need to submit their information to Nest separately, outside of QuickBooks Online. QuickBooks will not automatically send new employee details to Nest.
• Deleting or rolling back a pay run requires resending the associated Nest or Smart submission.
• All pension reports are accessible within QuickBooks, regardless of automatic Nest submissions.
• You'll still have to log into your Nest account to approve the direct debit payment like you usually do.

To turn on submissions:

1. Select the ⚙️ gear icon, and then select Payroll Settings.
2. Next to Pension submission, select the pencil icon to edit.
3. Select Turn on pension automation.
4. Enter your provider login credentials (username and password).
5. Select Submit automatically to ensure data is sent straight to the provider each time you run payroll.
6. Select Save. Submissions may take several minutes to process.

Manage multiple pension filings

If you use more than one automated provider (such as both Nest and Smart Pension), you can track all your submissions in one place.

• Pension Filings Page: Navigate to Payroll > Pension filings to see a tabbed view for each provider (e.g., Nest Pension Filings and Smart Pension Filings).
• Submission Status: You can view the status of each filing, such as Submitted or Rejected. If a filing is rejected, use the Submit button to attempt the submission again after correcting any errors.
• Date Range: Use the date filters to find specific past submissions for your records.

Turn off automatic submissions

1. Select the ⚙️ gear icon, and then select Payroll Settings.
2. Select the pencil icon next to your pension submission settings.
3. Uncheck Turn on pension automation.
4. Select Save.

Employees who are automatically enrolled or have opted in can choose to opt out. However, they must do so within one month of active membership or receiving their enrolment letter, whichever is later. The opt-out process must be completed through the pension provider.

Key considerations

• Employees who opt out within the valid timeframe receive a full refund of contributions.
• Employers are also refunded their contributions by the pension provider.
• Employees can cease membership at any time, but contributions made up to that point will remain in their pension pot.
• It is illegal for employers to pressure employees to opt out.

How to opt out an employee in QuickBooks

1. Follow this link to complete the steps in product
2. Select the relevant employee.
3. Click Workplace pension, loan & other deductions.
4. Click the pencil icon.
5. Turn off Enrolled in pension. If no refund is due, select Cease membership.
6. Select Opt out and enter the opt-out date.
7. Click Save.

Within five months of your staging date or duty start date, employers must submit a Declaration of Compliance to The Pensions Regulator to confirm they have fulfilled their pension duties.

To ensure compliance:

• Use the Declaration of Compliance checklist to gather necessary details.
• Ensure all employees have been assessed and enrolled where applicable.
• Maintain accurate payroll records for audits.

Every three years, employers must reassess employees who have opted out or ceased membership. This process is called cyclical re-enrolment.

Key points

• Re-enrolment occurs three years after the staging date or duty start date.
• Employers have a six-month re-enrolment window (three months before or after the original date).
• QuickBooks will automatically assess employees if re-enrolment is enabled in Payroll settings.
• Employers cannot use postponement during re-enrolment.
• Employees have the right to opt out again after being re-enrolled.

How to re-enrol employees in QuickBooks

1. Select the gear icon, then Payroll settings.
2. Next to Workplace pension, click the pencil icon.
3. Select Re-enrolment date.
4. If automatic re-enrolment is preferred, enable Do you want to re-enrol your employees automatically.
5. Choose the re-enrolment date and save.

Final steps

• QuickBooks will notify you six months before re-enrolment is due.
• Employers must complete a Re-declaration of Compliance with The Pensions Regulator after re-enrolment.
• Failure to complete this could result in fines and penalties.

What is a workplace pension?

A workplace pension is a retirement savings plan that UK employers are legally required to offer to their employees. Through automatic enrolment, a portion of your employee's pay is automatically invested in the pension scheme each payday.

What is my company's auto-enrolment start date (staging date or duty start date)?

Your auto-enrolment start date depends on when you first paid an employee through your PAYE scheme:

• If you paid your first employee on or before September 30, 2017, you have a "staging date."
• If you paid your first employee after September 30, 2017, you have a "duty start date."
• To find your specific date, enter your PAYE reference number on The Pensions Regulator's website.

What are my minimum employer pension contribution obligations?

As an employer, you are legally required to contribute a minimum of 3% of your employees' qualifying earnings into their workplace pension scheme. The total minimum contribution is 8%, with the remaining 5% coming from the employee.

Where can I find my PAYE reference number?

You can find your PAYE reference number:

• In the initial employer registration documents from HMRC.
• On official correspondence from HMRC.
• On P6/P9 coding notices or P30BC payslip booklets.
• On employee P45 or P60 forms.

Can I postpone auto-enrolment for my employees?

Yes, you can postpone auto-enrolling eligible employees for up to three months from their initial enrolment date. You must provide your employees with formal written notification of the postponement. However, this postponement does not alter your original staging or duty start date set by The Pensions Regulator.

What happens if I don't comply with auto-enrolment?

Failure to comply with auto-enrolment regulations will result in penalties and fines from The Pensions Regulator. You will typically receive a compliance warning letter followed by a statutory notice. If you miss your start date, you are obligated to:

• Inform your employees of the missed enrolment.
• Backdate both employee and employer pension contributions.
• Pay the backdated contributions promptly.

If you’ve missed your auto enrolment start date, you need to inform your employees and allow them to back-date their contributions. Additionally, you will need to back-date and pay any contributions that you missed during that time.

What are the differences between 'Net Pay Arrangement' and 'Relief at Source' for pension contributions?

Net Pay Arrangement: Pension contributions are deducted from employees' gross pay before income tax and National Insurance contributions (NICs) are calculated. This reduces the employee's taxable pay.

Relief at Source: Pension contributions are deducted from employees' net pay (after income tax). Basic-rate tax relief is automatically added to the pension pot.

Consult with your payroll provider and pension provider to determine which method is most suitable for your workforce and ensure compliance with HMRC regulations.