Payroll bureaus Setting up a workplace pension

In every pay period after your duties start date you’ll need to upload a pension data file to now:u. This file should contain details of your workers’ payments in to their pension savings, and your payments on their behalf.

If you’ve asked us to manage your statutory auto enrolment communications, uploading a pension data file will trigger tailored assessment, enrolment or postponement communications for each worker. 

Before your next pay period, download your employee action file to see information about workers who’ve opted out, started or stopped paying in, or changed how much they pay. You’ll need to put these changes into your payroll so they’re reflected the next time you upload a pension data file. 

You set up your first payroll as part of setting your organisation up on now:u. Run through the steps on how to do this in our guide.

now:pensions is a net pay pension scheme. You, the workplace, take pension contributions out of workers’ gross pay and pay them into now:pensions before income tax is deducted.  

You’ll need to: 

• work out pension contributions on gross (before tax) pay, and 

• calculate and deduct your workers’ income tax after you’ve taken their pension contributions. 

As a result, your workers who are taxpayers won’t pay any income tax on their pension contributions. They automatically get full tax relief. 

Workers who don’t earn enough to pay tax don’t normally get tax relief. The government has set up a scheme to pay a tax top-up to these workers, so they don’t miss out. HM Revenue & Customs (HMRC) will contact workers who aren’t taxpayers directly about this. Payments are expected to begin in 2026 for the 2024/25 tax year.

Self-employed workers will need to claim tax relief through their annual self-assessment tax return.

What other types of tax relief are there? 

There’s another type of tax relief arrangement called relief at source. In this kind of arrangement the workplace takes workers’ pension contributions from their pay, after income tax has been taken off. 

The pension scheme then claims the tax relief from HMRC each month, adding the basic tax rate of 20% to workers’ contributions.

Higher or additional-rate taxpayers can claim back the rest of their tax relief from HMRC through their annual Self-Assessment tax return. 

Make sure you set up your tax relief correctly

For now:pensions, you must set up your workplace pension for tax relief on the net pay basis. Otherwise, your workers’ contributions won’t be worked out correctly and you could end up having to compensate for any losses they may incur. If you’re not sure how to do this, please ask us for help using webchat.

As an employer, you are responsible for assessing each of your workers aged at least 16 and under 75, to identify which category of worker they belong to. This will help you to determine what steps you need to take for each worker. The Pensions Regulator has additional guidance that can help you.

However, your payroll team or payroll provider is best placed to assess whether your workers qualify to be auto enrolled into your workplace pension. This can help speed up the process and reduce the risk of you missing contributions.

now:pensions doesn’t assess your workers.