Apply a pension refund

Sometimes you may need to apply a pension refund if an employee is inside the pension opt-out window. To learn more, see The Pension Regulator’s Opting out.

Before you begin

Ensure a pension refund is only applied if the employee is inside their opt-out window (one month from active enrolment).

Additionally, ensure the employee has opted out with the pension provider directly.

How to apply a pension refund

1. From the left side bar, select Employees.
2. Select the relevant employee.
3. Select the Pension tab.
4. Click Change status in the pension scheme box.
5. Select Opt-out.
6. In the Opt-out pop-up, select the pension type (Relief at source, Net pay arrangement, or Salary sacrifice) and enter the Opt-out date. Click Opt-out summary.
7. Confirm the opt-out by clicking Opt-out employee name.
8. From the left side bar, navigate to Settings > Pay items.
9. Click Create one-off.
10. In the Pay item name field, enter a title based on the pension type. For Relief at source, select Net addition from the Payment type dropdown. For Net pay arrangement and Salary sacrifice select Gross addition from the Payment type dropdown.

    Note: For Relief at source, enter RAS Pension Refund (Net). For Net pay arrangement, enter NPA Pension Refund (Taxable only). For Salary sacrifice, enter Salary Sacrifice Pension Refund (Taxable & NI’able).

11. Add the relevant pay item to the employee in the draft payroll. To learn how, see Add one-off and recurring pay items.
12. Contact Support to adjust the employee and employer pension year-to-dates on the payroll. The employer pension will be refunded directly by your pension provider.