New to Umbrella

[deldez]

Hi, I understand I have to pay employers NI (even though I was not told this) but why do I pay Employers pension basically I`m paying £96.02 a week before I pay my tax and NI this is daylight robbery

[WTFH]

Hi, I understand I have to pay employers NI (even though I was not told this) but why do I pay Employers pension basically I`m paying £96.02 a week before I pay my tax and NI this is daylight robbery

Hi Deldez, who is your umbrella?
Are you sure it's definitely a pension payment?
Also, if you are paying it into a pension, it's not daylight robbery, you're paying into a pension, it's still your money - you just don't have access to it as it's in your pension.

[saptastic]

Pension Payments

I understood pension payments are mandatory now. Every single employer, including contractors employed through umbrella companies, need to enrol their workers into a qualifying workplace pension scheme. The amount is variable but I know there is a minimum % amount. Speak to your Umbrella who will clarify this.

[VelcroPower]

Hi Deldez, who is your umbrella?
Are you sure it's definitely a pension payment?
Also, if you are paying it into a pension, it's not daylight robbery, you're paying into a pension, it's still your money - you just don't have access to it as it's in your pension.

And if it makes you feel slightly better you're getting Employer and Employee NIC and tax relief on it (the employer pension payment not the employee pension payment - should be 20% on that)

How long have you been with the umbrella? Most use postponement to try and avoid putting new people into the scheme until it's absolutely necessary.

[TelcoData]

but why do I pay Employers pension basically I`m paying £96.02 a week

If you're paying out £96 a week in a pension then sweet earnings

https://www.nowpensions.com/help-cen...ribution-rates

The auto enrollment minimum is currently 5% of qualifying earnings of which at least 2% must be paid by the employer. In April 2019 this rises again to of 8% qualifying earnings of which at least 3% must be paid by the employer.

Working through a Payroll Company you are liable for both Employers and Employees Pension contributions.

[lucyclarityumbrella]

We defer all of our contractors for the first 3 months and then we must auto enrol them into our group pension scheme. As per the Employers NI the Employers Pension is deemed to be payable as an employment cost from the contract rate, for us this is a 3% and 3% split between the Employers and Employees, however the Employers contribution will only be auto enrolment, any additional contributions will be deemed to come from the Employee.

[kiwilondon99]

AE + pension

We defer all of our contractors for the first 3 months and then we must auto enrol them into our group pension scheme. As per the Employers NI the Employers Pension is deemed to be payable as an employment cost from the contract rate, for us this is a 3% and 3% split between the Employers and Employees, however the Employers contribution will only be auto enrolment, any additional contributions will be deemed to come from the Employee.

@lucy So 3 mths is a standard - max deferral time to deal with setup. After which you must [ agreed] enrol under AE- but 'empoyee'/contractor can then opt out, and no AE deductions ERs or EEs would be made. Correct ?
Do many of your contractors so, opt out - so they make thier own Co discertionary SIPP & if not already persanally contributing to their sipp monthly
its the enrol + then opt out which is of interest please, and the payroll implications
thks

[northernladuk]

@lucy So 3 mths is a standard - max deferral time to deal with setup. After which you must [ agreed] enrol under AE- but 'empoyee'/contractor can then opt out, and no AE deductions ERs or EEs would be made. Correct ?
Do many of your contractors so, opt out - so they make thier own Co discertionary SIPP & if not already persanally contributing to their sipp monthly
its the enrol + then opt out which is of interest please, and the payroll implications
thks

Contractor Umbrella had a good pension scheme where you could put whatever you want in and with a big name firm. I can't see why you'd want to opt out of it?

[VelcroPower]

@lucy So 3 mths is a standard - max deferral time to deal with setup. After which you must [ agreed] enrol under AE- but 'empoyee'/contractor can then opt out, and no AE deductions ERs or EEs would be made. Correct ?
Do many of your contractors so, opt out - so they make thier own Co discertionary SIPP & if not already persanally contributing to their sipp monthly
its the enrol + then opt out which is of interest please, and the payroll implications
thks

Not quite. Deductions will be made from the payroll at the point you are automatically enrolled, but once you opt out (via the pension provider) they will let the Umbrella know and they will process your refund, usually in the next pay run.

And then what NLUK said - if they have a separate non AE pension you can stick what you want in each month it becomes very tax/nic efficient.

[lucyclarityumbrella]

@lucy So 3 mths is a standard - max deferral time to deal with setup. After which you must [ agreed] enrol under AE- but 'empoyee'/contractor can then opt out, and no AE deductions ERs or EEs would be made. Correct ?
Do many of your contractors so, opt out - so they make thier own Co discertionary SIPP & if not already persanally contributing to their sipp monthly
its the enrol + then opt out which is of interest please, and the payroll implications
thks

Correct 3 months is the max postponement you can do for any employees. At that point the employee is auto-enrolled, and if they wish to Opt Out, they will sign and Opt Out form with the Pensions Company and no further deductions are taken, with the first deduction being refunded in the next pay-packet.
We do have a great pension scheme, and the majority choose to stay and contribute. If they wish to contribute to their own SIPP, then they must do this from their net pay and then declare on their self assessment.