As announced at Xerocon, today we’ve released stage one of our auto enrolment features within Payroll in Xero. To find out more about what auto enrolment is, take a look at The Pension Regulator’s website or our educational video.
We’ve previously shared our plans for auto enrolment. We want to help our business customers and their advisors stay compliant with the regulations. We’ve created a training video to step you through the changes in Payroll to support auto enrolment that’s available here.
The Payroll in Xero auto enrolment and pensions features are purpose-built to take away the stress of automatic enrolment. You can use it to assess your workforce and automatically enrol the required employees to ensure you comply with legislation.
Which auto enrolment features are available as part of this release?
- Enter and store the businesses staging date. Do you know when your staging date is? You can find out by using The Pension Regulator’s staging date tool. This is the date your automatic enrolment duties come into effect.
- Select a Workforce Postponement date (if applicable). Employers can postpone automatic enrolment assessment for up to three months from your staging date. However, it doesn’t change your actual staging date. And during the postponement period you must still accept any opt in notices. If you choose to postpone, you must write to tell your staff.
- Enter Pension Provider Information and pension information including pension types and contribution amounts. Payroll in Xero supports two types of pension schemes, Net Pay Arrangement and Relief at Source.
- Manage each employee’s workplace pension and auto enrolment settings. This includes their State Pension Age retirement date and their individual postponement date (if applicable). You can also manage any opt in or opt out dates and settings.
Once the staging date has been reached, Payroll in Xero will automatically start to assess the employees and auto enrol if they meet the requirements. All relevant factors are taken into account including the age, state pension age and wages information.
Each time the pay run is posted after the staging date, the auto employee assessment is processed to identify any new or existing staff that should then be auto enroled.
For more information please see our help centre.
Which auto enrolment features are coming next?
We’ve worked with The Pensions Regulator to obtain the staging dates for the majority of our existing payroll customers. We will automatically enter these into Payroll in Xero in a couple of weeks. If you enter a value in the meantime, we will not change the date that is entered.
At the beginning of March, a Pensions Contribution Report will be released to help. It will allow a business to see what contributions have been deducted from payroll in any given period. Once you start to deduct employee pension contributions, along with your employer contributions, you must pay these funds to the pension provider on a regular basis. This report will help show what amounts you must transfer to the pension provider.
Around May, we will be releasing seamless data transfer from Xero to the major market pension providers. This will allow for one-click auto enrolment compliance from assessment to data transfer. We will allow a seamless data transfer with the following pension providers: NEST, NOW:Pensions, The People’s Pension and Smart Pensions. If your fund does not allow seamless transfer then you will have to manually update their systems using the CSV output file. In the future we will also support Legal & General and Aviva data transfer.
The final piece of the auto enrolment puzzle is scheduled for mid-year with automated employee correspondence. With automatic enrolment, you’re legally required to provide your employees with relevant correspondence relating to their status and rights at the right time. Xero will inform you of the correspondence you must send each employee, let you know when and automatically generate for distribution.
If you find auto enrolment too daunting, there is no better time to seek advice from a payroll professional or trusted advisor. Find a certified Xero advisor to help manage payroll and your auto enrolment obligations.