Workplace DC I think employer is wrong

trevjl

Sorry for the bit of a waffle.
Today I received this months wage slip and my usual -£919 pension in the payments column is missing. This is in that column due to being taken from the gross (called smart pension ???). It appears this month in the deductions column. Also, the amount the employer pays has reduced this month from £299 to £183.
A bit of background, I went 3 days a week last August and this is the first month I have had a basic month (no overtime or overseas). I have questioned this and they say it is because of salary sac and minimum wage thing, which I am fully aware of, and this has come up this month for the first time due to the basic wage.
The issue is I have never been on salary sac, I didn't think the company offered it. 
I was under the impression that up to what I earn I can do whatever % I like ( I do 20%, company 6.5%)
Am I correct or does smart pension amount to the same thing as salary sac under these circumstances?

Marcon

trevjl said:

Sorry for the bit of a waffle.
Today I received this months wage slip and my usual -£919 pension in the payments column is missing. This is in that column due to being taken from the gross (called smart pension ???). It appears this month in the deductions column. Also, the amount the employer pays has reduced this month from £299 to £183.
A bit of background, I went 3 days a week last August and this is the first month I have had a basic month (no overtime or overseas). I have questioned this and they say it is because of salary sac and minimum wage thing, which I am fully aware of, and this has come up this month for the first time due to the basic wage.
The issue is I have never been on salary sac, I didn't think the company offered it. 
I was under the impression that up to what I earn I can do whatever % I like ( I do 20%, company 6.5%)
Am I correct or does smart pension amount to the same thing as salary sac under these circumstances?

If you're in a smart pension arrangement, then yes, it's salary sacrifice. Good explanation here: https://www.bdo.co.uk/en-gb/insights/tax/global-employer-services/smart-pensions-the-facts

If your contributions are paid by salary sacrifice, they are (technically) employer contributions. The salary you are actually receiving must meet minimum wage requirements.

If you want to contribute more, you can do so as a personal contribution (ie not by salary sacrifice). If this extra personal contribution reduces your pay below minimum wage, that's allowed because your employer is paying you the minimum wage; you are choosing how to 'spend' some of it.

Salary sacrifice gives you and the employer an NI saving, but the actual tax relief for you works out the same whichever method is used.

trevjl

Sorry if I have terminology wrong. 
I am in a net pay scheme, not sure if that's the same thing.
Couldn't get the link to work. 

Marcon

trevjl said:

Sorry if I have terminology wrong. 
I am in a net pay scheme, not sure if that's the same thing.
Couldn't get the link to work. 

The terminology is hopelessly confusing!

• Net pay actually means your personal contribution is taken from your gross salary before it is subject to income tax (NI is on your whole gross salary).
• Relief at source is where your contribution is paid from net pay (told you it was confusing!) and the pension provider claims basic rate tax on your behalf and adds it to your pension pot.

You might need to talk again to your employer to double check exactly what's going on. Minimum wage only becomes an issue if you make your contributions by salary sacrifice. You don't think the company offers it, but it looks as if they think they do!

WYSPECIAL

What the company pays has gone down because you have paid a contribution on this occasion.
If you pay by salary sacrifice then you don't pay any contributions. The company pays them for you in exchange for a lower salary.
A similar thing happened to me a couple of months ago (I'm part time too) when I had a flat month. Salary sacrifice would have put me below minimum wage so they couldn't do it. I t meant that I paid more NI than I otherwise would have done!

trevjl

Thanks for replies.
I understand that if SS is applicable then they are correct. What I can't get my head around is that I am most definitely Net Pay. If that is not the same then they have messed up, it wouldn't be the first time.
I was off for 3 months during covid and they tried to reduce my & their contributions even though they are based on last years earnings. I promptly told them they couldn't do that and they had to back down. Head office is frankly absolutely useless

Marcon

trevjl said:

Thanks for replies.
I understand that if SS is applicable then they are correct. What I can't get my head around is that I am most definitely Net Pay. If that is not the same then they have messed up, it wouldn't be the first time.
I was off for 3 months during covid and they tried to reduce my & their contributions even though they are based on last years earnings. I promptly told them they couldn't do that and they had to back down. Head office is frankly absolutely useless

Could you give this month's gross salary as shown in your wage slip; tax deducted this month; and pension contributions for this month (yours/the employers - whatever is shown your payslip). Might be easiest to post a copy of your wage slip with all personal information such as name, NI etc redacted.

Dazed_and_C0nfused

Marcon said:

trevjl said:

Thanks for replies.
I understand that if SS is applicable then they are correct. What I can't get my head around is that I am most definitely Net Pay. If that is not the same then they have messed up, it wouldn't be the first time.
I was off for 3 months during covid and they tried to reduce my & their contributions even though they are based on last years earnings. I promptly told them they couldn't do that and they had to back down. Head office is frankly absolutely useless

Could you give this month's gross salary as shown in your wage slip; tax deducted this month; and pension contributions for this month (yours/the employers - whatever is shown your payslip). Might be easiest to post a copy of your wage slip with all personal information such as name, NI etc redacted.

Although the NI information could be useful in distinguishing between salary sacrifice and net pay.

But to be honest I've never heard of a "Smart" pension being anything other than salary sacrifice.

trevjl

January 24

February 24

Marcon

Dazed_and_C0nfused said:

Marcon said:

trevjl said:

Thanks for replies.
I understand that if SS is applicable then they are correct. What I can't get my head around is that I am most definitely Net Pay. If that is not the same then they have messed up, it wouldn't be the first time.
I was off for 3 months during covid and they tried to reduce my & their contributions even though they are based on last years earnings. I promptly told them they couldn't do that and they had to back down. Head office is frankly absolutely useless

Could you give this month's gross salary as shown in your wage slip; tax deducted this month; and pension contributions for this month (yours/the employers - whatever is shown your payslip). Might be easiest to post a copy of your wage slip with all personal information such as name, NI etc redacted.

Although the NI information could be useful in distinguishing between salary sacrifice and net pay.

But to be honest I've never heard of a "Smart" pension being anything other than salary sacrifice.

Agree - I meant to put NI number!

Dazed_and_C0nfused

Marcon said:

Dazed_and_C0nfused said:

Marcon said:

trevjl said:

Thanks for replies.
I understand that if SS is applicable then they are correct. What I can't get my head around is that I am most definitely Net Pay. If that is not the same then they have messed up, it wouldn't be the first time.
I was off for 3 months during covid and they tried to reduce my & their contributions even though they are based on last years earnings. I promptly told them they couldn't do that and they had to back down. Head office is frankly absolutely useless

Could you give this month's gross salary as shown in your wage slip; tax deducted this month; and pension contributions for this month (yours/the employers - whatever is shown your payslip). Might be easiest to post a copy of your wage slip with all personal information such as name, NI etc redacted.

Although the NI information could be useful in distinguishing between salary sacrifice and net pay.

But to be honest I've never heard of a "Smart" pension being anything other than salary sacrifice.

Agree - I meant to put NI number!

Looking at the available payslip info it looks like salary sacrifice to me, not net pay.