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Set up workplace pensions in QuickBooks Online Core Payroll

by Intuit Updated 9 months ago

Learn how to set up workplace pensions in QuickBooks Online Core Payroll.

Before you begin, make sure you have the following information ready:

  • Pension provider name and reference number
  • How much your and your employees pay into the pension

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 a unique reference assigned to you.
    • 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.

Choose the pensionable pay types you want to include in your pension earnings. These are the earnings you selected during the setup with the pension provider.

  • Pensionable earnings always include salary or wages.
  • You may have also chosen to include other earnings like bonus, overtime or statutory pay.
  • If you're using a qualified earnings pension scheme, make sure that all your pay items, including any new ones, are included in pension earnings. You can confirm this with your pension provider.
  • Some pay types, like a bonus, can be excluded from pensionable pay. However, certain pay types like salary must be included in the pension calculations and won't be listed here.
  1. Select the gear icon, and then Payroll settings.
  2. Next to Pay types, select Pension pay types.
  3. Add a pay type that can be excluded from pensions calculations (like a bonus). If you're unsure, reach out to your pension provider.

Step 3: Let your employees know

You need to inform your employees about the enrolment process within six week of your duty staging date as an employer. Some pension providers can send out communications on your behalf. If they can't you can use The Pensions Regulator's letter template to write to your staff.

Step 4: Add employees to the pension scheme

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

  • QuickBooks will automatically enrol eligible employees into the workplace pension scheme when they become eligible.
  • Each time you run payroll, QuickBooks will assess employees who are not already enrolled into a pension scheme.
  • If you don't have a duty start/staging date, the assessment cannot be completed as all relevant information is required for employee enrolment, including cyclical re-enrolment.
  • If you have a duty start/staging date but no other information entered, you can set up your workplace pension scheme later.
  • If you haven't set up a workplace pension scheme yet, you can enter your duty start/staging date and other information when you run payroll.
  • If you have already assessed employees using another payroll software, remember to include their auto-enrolment status when adding them in QuickBooks.
  1. Go to Payroll, and then select Employees.
  2. Select your employee.
  3. Next to Workplace pension, loan & other deductions, select the pencil ✏️ icon.
  4. Select Set up workplace pension.
  5. Choose the worker category and applicable setting.
  6. Choose the pension provider. You can add a new one if you need to.
  7. Enter the employee and employer contribution amount/percentage.
  8. Select Save.

Automatic enrolment and postponement

All employers are required to provide a workplace pension scheme for their employees. This is called ‘automatic enrolment’.

You have the option to delay determining which employees should be enrolled in a pension scheme for up to three months. This is called postponement.

It is important to communicate with your staff and inform them about the postponement and how automatic enrolment applies to them. For more help and info, read The Pensions Regulator postponement guidance.

Opting out of a pension scheme

According to The Pensions Regulator, if an employee opts out of an auto-enrolment pension, they are entitled to a full refund of their contributions within a month of receiving a valid notice. Here's how to opt an employee out of a pension scheme.

Step 5: Complete the declaration of compliance

As an employer, you must submit a Declaration of Compliance to The Pensions Regulator within 5 months of your staging date/duty start date to confirm that you've fulfilled your auto-enrolment duties. Failure to do so on time may result in unwanted penalties and fines.

Use the Declaration of Compliance checklist to check that you have all necessary information ready.

Step 6: Reassess your employees

Every 3 years after your initial duty start/staging date, you need to reassess employees who have opted out or stopped being members in previous years.

If you chose to enrol your employees automatically in Step 1, QuickBooks will re-assess employees who have opted out or stopped their membership and will categorise them accordingly.

You have the flexibility to choose a specific re-enrolment date within a 6-month window. You also have to inform employees who have opted out or ceased membership that they will be reassessed and potentially re-enrolled, if applicable.

You also have a duty to complete the Declaration of Compliance with The Pensions Regulator.

More help

Looking for guidance on navigating QuickBooks Online Core Payroll? Check out this resource page with how-to guides to help you.

A workplace pension is a retirement savings plan for employees that employers in the UK are legally required to offer. Through automatic enrolment, a percentage of the employee’s pay is put into the pension scheme automatically every payday.

Your duty start date or staging date for auto-enrolment depends on when you start paying your first employee under the PAYE scheme.

  • If you pay your first employee after 20 September2017, you’ll have a duty start date. 
  • If you’ve paid your employee on or before 30 September 2017, you’ll have a staging date. 

You can find your staging date in a letter from The Pensions Regulator by entering your PAYE reference number on their website.

Employers must pay a minimum contribution to their employee’s pension scheme. The minimum contributions for employees are currently 5% with employers paying a minimum of 3%.

Your PAYE reference can be found in the booklet that HMRC sent you when you first registered as an employer, or in other communication from HMRC. You can also check the following documents:

  • P6/P9 coding notice or P30BC white payslip booklet 
  • Any P45 or P60 form that you have given to your employees

Yes, you can postpone when you must auto enrol eligible employees for up to 3 months from certain dates by writing to your staff to tell them that you’re postponing auto enrolment. However, the duty start/staging date will remain the same.

If you don’t comply with auto enrolment, you may be faced with unwanted penalties and fines. The Pensions Regulator is strict about you meeting your legal duties, and you’ll get a warning letter and then a statutory notice telling you to comply.

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.

Net pay arrangement deducts pension contribution before taxes and NICs. For example, from gross pay, resulting in reduced taxable pay by the employee's contribution. Best for higher or additional tax-paying employees for immediate tax relief.

Relief at source suits basic tax-paying employees. Higher or additional tax payers under this arrangement can avail additional tax relief via self-assessment.

Confirm with your pension provider on which of two methods to use when calculating the percentage deduction from an employee.

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