Making a single pension contribution for your employees
Help your employees boost their pension savings by making a one-off payment into their pension
Why make a one-off payment into your employees’ pension?
More money for retirement
The longer pension savings are invested, the longer they have to grow
Reduction in Corporation Tax
Single pension contributions may be deducted as a business expense
Make a payment when it suits you
No commitment to extra regular payments, just when you can afford to
How do I make a single pension contribution for my employees?
There are two ways:
1. Normal payroll file upload (papdis or API), pay now or bonus exchange
Normal payroll file upload (papdis or API)
- This is paid through the same payroll process as your normal regular pension contributions.
- If you want to meet the tax year end deadline of 5 April you should contact your payroll team or service provider before February, and you’ll need to upload your payroll before 5 March.
- If you miss the 5 March payroll deadline, you can use the ‘pay now’ feature below or option two.
Pay now
- You can use this feature to pay at any point in the month as long as no other payment is in progress.
- To meet the tax year end deadline of 5 April, you will need to press the ‘pay now’ button by 22 March at the latest.
- Find out more about the pay now feature.
Bonus exchange
- If your employee is paid a bonus, you may be able to do a ‘bonus exchange’ (sometimes called ‘bonus sacrifice’). This could generate savings in national insurance contributions for both of you.
- Visit the MoneyHelper website for more information about tax relief.
- Bonus exchange will count as employer and not member contributions or AVCs. If you’re processing it through your normal payroll, the contribution details should be in the employer column.
You can make a single contribution at any time of the year – the deadlines above relate to meeting the tax year end deadline of 5 April.
2. BACS process from your business bank account
- You will need to fill in this form and submit it – you need to fill out section 1 and your employee needs to fill out section 2. We will then be in touch with you about the next steps.
- We can accept single contributions at any time, but if you want to meet the tax year end deadline of 5 April, you need to return the form to us by 27 March at the latest.
Your single pension contribution checklist:
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Both you and your employees should seek appropriate financial advice to make sure there are no taxation or other technical problems with the payment of the single contribution.
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Make sure the amount is allowed as a business expense for Corporation Tax relief purposes – once it’s in the pension scheme, it can’t be refunded to you. We recommend you contact your tax adviser.
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Tell your employee that it's their responsibility to make sure that the single contribution complies with the annual allowance rules, otherwise they may face an unexpected tax bill.
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Check which tax year the single contribution falls in. Single contributions can be made at any time during the year, but if it’s after 5 April it may not count against the member’s annual allowance until the next tax year. You should speak to your employee to check which is the appropriate tax year for their contribution planning.
Do you need impartial guidance or advice?
We can’t give financial advice – this article is for information only. If you need any specific advice about the contribution allowances and rules, and how much you can, or should, contribute, you should speak to your usual tax adviser. Alternatively, you can contact a retirement adviser. If you don’t have one you can find one using MoneyHelpers find a retirement adviser guidance.
Here to help
Get in touch with us if you have any questions by using our employer contact form.
