To enable the software to determine what amount of employees’ total earnings are pensionable pay, you must indicate which payments are pensionable.This means that, for each payroll code that represents a payment that is pensionable income, you must indicate that the pay element is pensionable.
To define the pay elements that can be part of employees’ pensionable pay:
- Click Payroll > Module Setup > Payment/Deduction. The Payment/Deduction window is displayed, and all the payroll codes for the pay elements (payments and deductions) are listed.
- Select a payment that you want to indicate is pensionable.
- Click Edit to edit the details for the payroll code. For example, select the payroll code for salary or basic pay, because that part of an employee’s income is pensionable. The Payment/Deduction window is displayed
- Click the Controls tab.
- Under Statutory, select the Pension check box to indicate that the payment is pensionable. When a payment is not pensionable, clear the Pension check box.
- Click Save to save the payment details.
- Click Close to close the Payment/Deduction window.
- Click Close to close the Payment/Deduction window.
For each payment that can be part of an employee’s pensionable pay, repeat the steps in the above procedure. For all those payments that are not pensionable, ensure that the Pension check box on the Controls tab is clear.
For each payroll code, you can also define the pension schemes for which contributions can be calculated.
To define the pension schemes for which contributions can be calculated:
- Click Payroll > Module Setup > Payment/Deduction. The Payment/Deduction window is displayed, and all the payroll codes for the pay elements (payments and deductions) are listed.
- Select a payment for which you you want to define pension schemes for which contributions can be calculated.
- Click Edit to edit the details for the payroll code.
- Click the Pensions tab. The Pensions tab is available only when the Pension check box on the Controls tab is selected.
- To specify the schemes for which contributions can be calculated for the selected payment, click Attach next to each pension scheme.
- Click Save to save the payment details.
- Click Close to close the Payment/Deduction window.
- Click Close to close the Payment/Deduction window.
Note: you can override the settings for a payroll code, so you can, for a selected employee, make a payment part of pensionable pay, even though the payroll code is set up as not pensionable. For information, refer to Override settings for a payroll code.