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How will a 4-4-5 payroll affect my contribution schedules?

If you’re aligning your 4-4-5 workers to a group with calendar month earnings period, there’ll normally be one pay day in each of these calendar months. But occasionally you could get:

  • two pay days in a calendar month
  • a calendar month that contains no pay day.

For these two scenarios you should tell us the actual pensionable earnings paid to the worker during the calendar month and calculate contributions based on that.

When you set up workers with a monthly frequency you’ll need to submit a contribution schedule for each pay period. Any contributions in a pay period will need to be submitted in a contribution schedule.

This means contributions may sometimes be zero and sometimes be roughly twice the normal amount. The worker will remain a member of Nest, they just won’t have contributions for the pay period where there isn’t a pay run. You’ll need to submit a zero contribution schedule for the workers and enter the reason ‘Member has insufficient earnings’ for non-payment. For more information please see How do I tell NEST a member has insufficient earnings by entering the information onto the website? or How do I mark a member as having insufficient earnings using file upload or file transfer?

The following table shows how contributions need to be sent if there’s one pay day in a pay period, multiple pay days or no pay days.

Contribution schedule pay period  Pay day  Comments
01/04/2021 – 30/04/2021  01/04/2021  Collate contributions from both pay days and submit them in this contribution schedule as a single sum. If you send a contribution schedule for each of the payroll runs, then the second will overwrite the first.
01/04/2021 – 30/04/2021  29/04/2021  Collate contributions from both pay days and submit them in this contribution schedule as a single sum. If you send a contribution schedule for each of the payroll runs, then the second will overwrite the first.
01/05/2021 – 31/05/2021  No pay day  Submit a contribution schedule showing zero earnings for all workers, and a non-payment reason of ‘Member has insufficient earnings’. Make sure you submit this schedule for payment to avoid a late payment, even though the total amount due will be zero.
01/06/2021 – 30/06/2021  20/06/2021  Collate contributions from both pay days and submit them in this contribution schedule as a single sum. If you send a contribution schedule for each of the payroll runs, then the second will overwrite the first.
01/07/2021 – 30/07/2021  20/06/2021  Collate contributions from both pay days and submit them in this contribution schedule as a single sum. If you send a contribution schedule for each of the payroll runs, then the second will overwrite the first.

 

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