I realise this post is old, and is not necessarily directly related to the original query, but thought this may help others on similar issues.
A 'relief at source' scheme is where the employee receives basic rate tax relief at source when they pay their net pension contribution, i.e. tax and NI are deducted on gross salary first; In this case however the pension provider will claim relief back on behalf of the employee, paid back to their plan.
In a net pay scheme, contributions are deducted from the employee's gross salary before tax has been deducted, but after NI is deducted on gross.Basically employee and employer NICs are calculated on gross salary.
With Salary Sacrifice; contributions are deducted from the employee's gross salary before tax and NI calculations, both employer and employee save on NIC.
Note: this may only be beneficial for certain level of employees above a particular threshold or those self-assessment tax payers.
All our employees have a salary sacrifice arrangement for their pension contributions.
Both employee and employer contribute typically contribute a % each into a pension scheme set-up by the employer.
We have one employee who uses the workplace pension (NEST) and has a salary sacrifice arrangement.
We use NEST but do not use Pensionsync. Further details are provided here:
https://quickbooks.intuit.com/learn-support/en-uk/help-article/retirement-benefits/pension-quickbook...
For salary sacrifice pension arrangements specifically, it is important to ensure that in QBO payroll the Pay Deduction Category is set up correctly, for example say "Pension Salary Sacrifice"[*]. This is a "Pre-tax Deduction" and NI should be set to Reduce Niable earnings,
In QBO AP using the Manual Set-up process, create a scheme name, e.g. "Pension-Workplace". Complete your company admin details and scheme provider details and name. Add one or more types of 'Contribution Plans', which is used for groups of employees where % deductions differ per group.
For example, if using NEST pensions (UK), you may have one or more Groups set up there, e.g. Group 1 and Group 2, and it may be more identifiable to use the same titles for each Contribution ID here, if you wish (these can be amended).
In each Contribution Plan, you typically enter the corresponding figure for the employee % and employer %
If using salary sacrifice, enter the employer % and enter employee % under salary sacrifice (not employee %)
Ensure you add the 'Deduction Category' [*].
Now select an 'Employee', under 'Pay Run Settings', click on 'Pay Run Inclusions'
1) Click Add HMRC adjustment:
Contribution Type -> 'Employer pension contribution'
Amount -> Fixed -> enter the total amount for the employee (employee + employer contribution)
Start date and end date and SAVE.
2) Click Add 'Deductions';
Select the Deduction Category [*]
Amount => Fixed -> enter the employee amount only.
Select Deduction 'paid to pension scheme', then select the scheme from drop down
Under salary sacrifice arrangements, an employee doesn’t make any contributions to the pension scheme themselves.
Payments to the pension provider are employer only**, as such the provider will not claim tax relief on behalf of the employee, since the employee has already benefited from reduced tax and NI. In addition, the employer will benefit from the NI saving as well.
It is important to ensure that the pay deduction category is correctly set-up regarding impacting NI calculations or pensionable salary.
This resolved the calculation for us so the employee and employer NI is calculated *after* the pension salary sacrifice has reduced the gross salary.
Quickbooks does provide further information here too:
https://quickbooks.intuit.com/learn-support/en-uk/help-article/pensions/set-pension-salary-sacrifice...
