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.

However, 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 and process pension contributions as normal, after tax is deducted and inform NEST.

To add a pension group to deduct before tax

  • 1. Pensions tab > Edit Pension.
  • 2. Add Group > complete the details as your original NEST pension group.
  • 3. Select Deduct before tax check box > select Default Plan check box.
  • 4. Save > Save.

To process contributions to deduct before tax

  • 1. Pay Runs tab > Process Pay Run.
  • 2. Select the relevant employee > 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 set the original pension group as the default.

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

To enter a valid NI number

  • 1. Employees tab > select the relevant employee.
  • 2. Edit > enter NI Number.

You should also select the default pension plan for this employee, before you process the next pay run.

  • 3. Workplace Pensions tab > Choose Default Plan.
  • 4. Click Save.

To correct a previously processed pay run

  • 1. Follow the steps in the To add a pension group to deduct before tax section.
  • 2. Pay Runs tab > click the relevant completed pay run > Edit Pay Run > Yes.
  • 3. Select the relevant employee > click the delete button next to the relevant payment.
  • 4. Add Payment > choose the required payment > enter the relevant amounts.
  • 5. Repeat the steps above for each pay run you need to correct.

Once you receive an NI number for the employee, follow the steps in the To enter a valid NI number section.

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