Setting up Salary Sacrifice

Salary sacrifice is a deduction initiated by the employee and is set up as a deduction. To set up a salary sacrifice you will need to:

Go to the employee record for the employee that you want to create the salary sacrifice for and under the 'Pay Run Settings' section click 'Pay Run Inclusions' > click on 'Add' on the right side of 'Deductions'.

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You will see the following page where you will need to complete the following details:

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  • Select Salary Sacrifice Pension from the drop down menu under 'deduction category'.
  • Enter the deduction amount to be applied per pay run. It can be a 'Fixed amount' or a  'Percentage of Gross'. If you chose fixed amount you will need to enter the fixed amount in £'s and if you choose percentage of gross you will need to enter the percentage.
  • You should set the priority if there is more than one inclusion.
  • Select whether the deduction should be paid manually or to a bank account. 
  • Select how the preserved earnings should be used from the drop down menu.  Preserved earnings are a fixed pound amount that is used to indicate the minimum amount an employee must be paid before a deduction can be made.

    You will have the option to choose 'Never', 'Once a minimum net earnings limit has been reached' or 'Once a percentage of net earnings limit has been reached'.

    If you select once a minimum net earnings limit has been reached you will need to enter the preserved earnings amount (per pay run) or once a percentage of net earnings limit has been reached.

    You will then need to set what to do if the amount is not reached: Do not pay the deduction or to Pay the deduction up to the preservation limit.

    You will then have the option to:
    Carry forward unpaid deduction amounts if the preservation limit is not reached
    Current unpaid deduction amount carried forward: £0.00
    or
    Carry forward unused preserved earnings if the preservation limit is not reached
    Current preserved earnings carried forward: £0.00
  • Apply a note if you would like this deduction to have a note attached on the employee's pay slip.
  • Please state when you want this pay run inclusion to start and when it should expire.
  • Click save.

If you have any questions or feedback, please let us know via support@yourpayroll.co.uk

 

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