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Employee with no national insurance (NI) number - NEST pensions

Employees get tax relief on their pension contributions and this can be one of two arrangements – net pay or relief at source. NEST pensions use a relief at source pay arrangement , therefore contributions are always deducted after tax.

If you employ a UK worker but don’t hold a national insurance (NI) number for them, NEST state that you must deduct contributions for this employee before tax.

Before you process the pay run that the employee is enrolled on, you must setup a new group for your NEST pension scheme. Once you do receive an NI number for the employee, you should enter this in their employee record and process pension contributions as normal, after tax is deducted and inform NEST.

To add a pension group to deduct before tax

  • 1. Go to the Pensions tab and click Edit Pension.
  • 2. Click Add Group, then complete the details stated in your original NEST pension group.
  • 3. Select Deduct before tax check box then select Default Plan check box.
  • 4. Click Save.

To process contributions to deduct before tax

  • 1. Go to the Pay Runs tab and click Process Pay Run.
  • 2. Select the relevant employee, then click Next.
  • 3. Enter the payment details.

If eligible the employee enrols automatically and contributions deduct before tax.

Before you process your other employees’ pay, you must now set the original pension group as the default by following the below steps.

  • 4. Go to Pensions, then click Edit Pension.
  • 5. Click View / Edit on the original pension group, then select Default Plan check box.
  • 6. Click Save.
  • 7. Go to the Pay tab, then click Process Pay Run.
  • 8. Complete pay run as normal.

To correct a previously processed pay run, you can delete the incorrect payment and replace it with the new one, entering the correct amounts. You can find more information about correcting previous pay runs in our corrections help centre .

Once you receive an NI number for the employee, you can add it in the employee record.

Read more about automatic enrolment >

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