Salary sacrifice or salary exchange is an arrangement where an employee gives up part of their salary and in return the employer pays it into their pension pot as an employer contribution.
To set up a new Worker Group
This should only be completed once your last submission has been uploaded.
Log into account
Go to Manage Account. You will then see 4 boxes
Under Manage Employer, select Manage Worker Groups
Choose which heading fits your requirements:
Option 1:
If all of your employees are moving to the salary sacrifice pension:
Click EDIT on your current group (If you are unsure of your current group, head back to your Account Home page and, under Manage account, click on Manage employee details. Check the data in the “Worker group” column).
You can change your worker group description if helpful (e.g. Salary Sacrifice)
Ensure the contribution basis reflects either Qualifying Earnings or the appropriate Set. Please ensure the contribution basis reflects either Qualifying Earnings or the appropriate Set – refer to table below for minimum percentages.
Enter the date the change is to take effect (e.g. 01/11/2024)
Change the contribution percentages to reflect 0% Employee and enter your minimum total contribution (min Employee + min Employer) in the Employer box (e.g. for 5% employee and 3% employer contributions, you would enter 8% Employer contribution).
Click Update - You are all set up and no further action is needed!
Option 2:
If only some of your employees are moving to the salary sacrifice pension:
Select Add a new worker group
Add a group identifier (e.g Salsac, or SS)
Follow the steps from b to f above
Now head to the next steps below under “To move employees to new group”
Move employees to the new Worker Group
This should only be completed once your last submission has been uploaded
You can move employees to a new group by one of two methods:
If your payroll software is integrated with TPP
When you submit your next filing, ensure the new group is reflected correctly on your upload data for each employee as required. Once you upload this data to TPP, your employees will be automatically moved to the new group
2. If you upload your files manually
You can either:
a. Upload a Maintenance File which will just move workers to the new group. When you come to upload your contribution file later in the month, ensure the new group is reflected correctly on your upload data for each employee as required.
b. Upload a Full File (recommended) which will move workers to the new group AND will contain the month’s contributions at the same time, or
c. Change each employee manually on the TPP site when entering the month’s contributions.
When in the Home page, select Submit employee data
Under the relevant employee, select Edit
Under the Worker Group drop down menu, select the new group
Save and continue
Enter the monthly contributions. If the employee is on a salary sacrifice pension, ensure that the total contributions shows as anEmployer only amount, with employee contribution as zero.
The Pensions Regulator’s minimum contribution table
Pensionable Pay Basis | Earnings to be included in calculation | Minimum Employer Contribution | Minimum Total Contribution |
Qualifying earnings | The band of gross annual earnings used to calculate minimum contributions is currently earnings between £6,240.00 and £50,270.00 and pensionable earnings must include all earnings such as salary, bonus, commission, holiday pay and overtime | 3% | 8% |
Tier 1 - Basic Pay | Pensionable pay is calculated from the first £1 earned and must include at least the workers basic salary. | 4% | 9% |
Tier 3 - All Pay | Pensionable pay is calculated from the first £1 earned and must include all earnings such as salary, bonus, commission, holiday pay and overtime. | 3% | 7% |