Workplace pension via salary sacrifice calculations

LoneRanger123

Hi,
I need a bit of help with salary sacrifice and pension calculations.

My hourly pay is £16.36, working 40h/week (£654.40/week gross).
I've been  paying 8% into my workplace pension (£52.35/week) via salary sacrifice (8% is the most the company would match) for the past few months.
Now the payroll dept says I can only pay in £41.88/week via salary sacrifice as any more would mean I get less than min. wage.

Just to point out, nothing has changed (no extra deductions or anything like that). I was paying in 8% via SS for the past few months, but as of January, the payroll suddenly decided that I can only pay in £41.88 (not 52.35 like I used to pay) because it would take me under nat. min. wage.
How on Earth did they come up with this? I asked them for an explanation, calculations etc but they keep fobbing me off with the min. wage. Unfortunately, payroll are based in a completely different city so can't just pop in for a chat.

How come last year I was able to pay in £52.35/week but this year it's only £41.88/week via SS when my income is exactly the same?
Thanks.

LeafGreen

Could it be down to an increase in NMW?
It’s one possibility, although the sums still don’t seem to add up!

LoneRanger123

I though the NMW will increase in April, so at the moment it's still the same it was for the majority of last year. Also, I was able to pay £52.35/week from July (when the salary sacrifice scheme started) until the end of December (paid weekly) but as of January it's suddenly only £41.88. NMW does not change in Dec/January so can't see how that would be related.
I tried to do the maths but it wasn't adding up for me and payroll refused to provide an explanation (except for 'can't pay in that much, below min. wage'). I still have no idea why it was possible last year but now it's not... 

Saver73

I wonder if your employer is calculating pension on qualifying earnings?  That would account for their comments re NMW.

If you calculate your hourly rate to annual salary, minus qualifying earnings, then using the salary calculator your weekly wage is around £444.10 / £11.10 ph.

Edited to amend figures above and add calculation below.

Salary converted from hourly rate = £34,028

Minus qualifying earnings £6420 to calculate pension

Salary on which pension is calculated = £27,608

Annual EE pension contributions = £2,722

Salary net of pension £24,886 before tax and NI

Gross weekly pay £478.58 is around £11.58 p.h

https://www.thesalarycalculator.co.uk/salary.php

Saver73

There is another post on tbe forum with a similar question - see below - and there are some additional links that may help.

https://forums.moneysavingexpert.com/discussion/6520693/understanding-pension-contributions-from-payslip

sheramber

Could the higher amount be based on the fact that from April to July(when ss started) you had three months of not paying so had extra earnings available  until December?

LoneRanger123

Hi, thanks for all the replies.
As it turns out, I am no longer in Salary sacrifice scheme at all.

I got another email from payroll:
Last week you dropped below national minimum wage and therefore you were moved in the RAS Scheme. Once employee’s have been moved into the RAS scheme they can’t go back into the Salary Sacrifice Scheme.

I have asked several times for the actual calculations (because I don't understand how earning £16.36/hr can end up being below min. wage). but they are ignoring that and just fobbing me off with 'below min. wage' excuse.
Also, is it true that I can't go back in the SS scheme in the future? Seem a bit strange...