In this article
An Additional Voluntary Contribution (AVC) is where an employee has requested to pay an additional amount into their pension alongside their standard pension contributions.
In Pento there is already a pre defined pay item set up for you to utilise, to reflect any AVCs that are in your payroll.
To do this, you would need to follow the below steps:
- Select Payrolls from the menu on the left > select the payroll in which you want to add the AVC
- Select the employee you want to add the AVC to
- From the in view payslip that appears, select add Pay Item
4. Select to add a Gross Deduction > select AVC Pension from the list that appears
5. Enter the amount of the AVC you want to deduct in this period and ensure that the pensionable toggle is set accordingly
Please note: you wouldn’t normally set an AVC deduction as pensionable, as you wouldn’t normally want the AVC to reduce pensionable pay. This deduction is made to increase an employees pension.
Select Add Gross Deduction once you are happy with your settings
You will then see the additional deduction on the payslip
How to set up a recurring AVC or an AVC that isn’t a gross deduction
Employees may choose to make an AVC on a regular basis for a set amount.
You may also find that your AVC shouldn’t be a gross deduction, but rather a net deduction, so that the tax relief isn’t claimed via the payroll.
In these instances you would need to set up a recurring pay item, with the relevant tax settings applied to ensure that the AVC is deducted correctly via the payroll.
Please see our article on Pay Items, if you need any help with this.
Frequently Asked Questions
Does the AVC automatically get reported to the pension provider?
No, currently any AVC that is added to the payroll is not then automatically added to the pension report.
To ensure that the AVC is reported to your pension provider, please ensure that this amount is added to your pension report before you submit this.