I am acting on behalf of one of my clients and have just set up NEST pension for him. When I tried to put his employee contributions on NEST website and submit them from there rather from my payroll software I got an error message. The reason was because I calculated his contributions based on employee's qualifying earnings rather than full pensionable pay ( £850 monthly pay - £490=£360 on which I applied 1% employer cont=£3.60 and 0.8% employee cont=£2.88)
On the NEST website those contributions where calculated on the full amount of £850 and when I phoned NEST helpline asking how to amend their calculations I was told that was impossible as if done that would mean that the employer would not meet his legal requirements. When I asked NEST advisor for more explanations as according to me that was wrong they told me to seek further financial advice?
I am pretty sure that every employer can decide whether to use full pensionable pay or qualifying earnings and apply the minimum percentage on chosen amount and in both cases they will meet their legal requirements. Am I wrong in my calculations?
Any help would be highly appreciated