Add a Nest pension scheme

If you have a Nest pension scheme for your employees, you can easily set this up in Sage Payroll.

You can make online submissions directly to Nest or download the files you need to upload them to the Nest portal.

This article explains:

  • The Nest pension information you need and where to find it.

  • How to set up your Nest pension in Sage Payroll.

  • What you need to do after you have set up your Nest pension.

Before you start

Before you can set up your pension scheme in Sage Payroll, you need certain bits of information from Nest.

It is really important to get these, so the pension calculates correctly for your employees.

You can find the information you need in 2 different ways.

Log into your Nest online account (opens in a new tab)

Check your letters from Nest. View an example of a Nest letter (opens in a new tab).

You will need the following information:

Note: You must ensure that your Nest group payment frequency is set to Tax periods. For example, Tax monthly instead of monthly. If not, please contact NEST to help you.

  • The type of contribution. Whether it is salary sacrifice, deducted before tax or deducted after tax.

  • The type of deduction. Whether it is a percentage or fixed amount.

  • The employee and employer contribution percentages or amounts.

  • Your earnings basis. For percentage contributions, whether it is based on pensionable pay, qualifying earnings or custom earnings.

Note: Earnings basis does not apply for salary sacrifice pensions.
  • Your contributions payment date. When you pay your pension contributions to Nest.

After you've gathered all the information you need to accurately set up your Nest pension, you can add it to Sage Payroll.

How to set up your Nest pension

  1. Select Pensions, then Add a new pension.
  2. Select NEST Corporation.
  1. In the Employer reference box, enter your employer Nest ID.

  2. Select Add Group,and complete the relevant fields from the table.

    Group name Enter a name for this plan. This should match the name of your group from Nest.
    Type of contribution

    Choose the type of contribution you have with Nest.

    • Salary sacrifice - The money paid into the pension is taken from your employee's gross pay before tax and National Insurance is calculated.
      Note: If you choose Salary sacrifice, you then need to enter the percentage contribution for the employer and employee. The employee contribution is shown as a negative payment on the payslip.

    • Contribution deducted before tax - The money paid into the pension is taken from your employee’s gross pay, before tax is calculated. Taxable gross pay is reduced by the amount of the pension contribution, therefore the employee does not pay tax on this contribution.

    • Contribution deducted after tax - The money paid into the pension is taken after tax is calculated, and the pension provider claims back the Basic Rate tax paid on this contribution, direct from HMRC.
    Type of deduction Choose whether the rates are a percentage of the employees’ pay or a fixed amount.
    Note: This option is not available for Salary sacrifice contributions.
    Employer Contribution Enter the percent or fixed amount you pay into the pension scheme.
    Employee Contribution Enter the percent or fixed amount your employee pays into the pension scheme.
  3. Select Next and complete the relevant fields from the table.
    Earnings BasisIf you chose a percentage deduction, choose one of the following options:

    • Pensionable Pay – All payments that you’ve selected the Pension Earnings check box for are included in the pension calculation for that pay period.
    • Qualifying Earnings – All payments that you’ve selected the Qualifying Earnings check box for are included in the pension calculation for that pay period.
    • Custom Earnings Basis – To enter your own thresholds for pension contributions, choose this option. You can then enter an annual lower and upper earnings limit. When you process your pay run, Payroll automatically adjusts the thresholds based on the pay frequency and only deducts pension on earnings between the two bands.

    These options are not available for Salary sacrifice contributions.

    Annual lower earnings limit (£)This option only appears if you chose Custom Earnings Basis. Enter the annual lower earnings limit for your pension.
    Annual upper earnings limit (£)This option only appears if you chose Custom Earnings Basis. Enter the annual upper earnings limit for your pension.
    Contributions payment dateSelect the date you pay the pension contributions to your pension provider.
    Default plan (optional)To automatically enrol all employees into this pension scheme, select this check box. You can change this for individual employees when you process their pay run.
     
  4. Select Save. You can repeat the process to add more groups if required.
  5. Select Add Payment Source, then enter a name for your payment source. This should match the name of your payment source from Nest.
  6. If this is the default payment source, select the Default check box.
  7. Select Save and repeat the process to add any more payment sources.
  8. Select the Qualifying Scheme check box.
  9. To read the terms, select the our terms link. Then to accept them, select the Terms check box.
  10. Select Save.

Next steps

If you couldn't find all your Nest information, you can contact them directly on 0300 020 0090.

If you already use Sage Payroll and have set up a new pension, you need to add your employees to the scheme

If you have set up pensions as part of an FPS import, you can now continue the FPS import process

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