If an employee requests to make an additional payment into their pension on top of their usual pension contributions, for example, if they want a bonus in the period to go directly into their pension, this is possible via an AVC (Additional Voluntary Contribution) element.
Applying an additional voluntary contribution for an employee
Log in to Paycircle.
Open the relevant payroll company.
Click Current Period.
For the relevant team member, click the action cog ⚙️.
Click Add a change.
Click on the Deductions tab.
Select from the list either Employee Pension AVC or Employee Pension AVC %, as required.
Employee Pension AVC: This element can be used to apply a fixed contribution (e.g., £500).
Employee Pension AVC %: This element can be used to apply a percentage contribution based on an entered value or the employees salary.
Click Save.
Relief at Source (RAS) pension schemes
When utilising an AVC pension element for a team member within a RAS scheme, you will need to input the full contribution value, inclusive of tax, and not the net of basic rate (BR) amount. It is important to note that the reduction for BR tax associated with the AVC value will be applied to the team member’s standard contribution for that period.
For example, let's assume:
A team member is part of a RAS pension scheme, and has a standard contribution value of £152.50. The net of BR value is £122.00, and the relief value is £30.50.
The team member then contributes an AVC of £125.00. The net of BR value is £100.00, and the relief value is £25.00.
The total standard contribution will then be displayed as £97.00 (£122.00 – £25.00 relief from the AVC) and the AVC will display as the full contribution value, inclusive of BR tax.