Processing Share Scheme Contributions

Share scheme deductions are calculated and processed in the normal payroll process. If a payee contributes to more than one share scheme, the system processes the deductions in order of the payee's start date. The scheme that the payee joined first is processed first.

Share save and buy contributions are processed separately:

• Share buy scheme contributions are pre-tax deductions and processed before statutory deductions.

• Share save scheme contributions are post-tax deductions and processed after statutory deductions for tax, National Insurance (NI), court orders, and student loans.

Share scheme processing checks:

• Whether contributions are suspended.

  The rules of the share scheme define whether contributions are suspended during maternity leave. For share save schemes, contributions can also be suspended for contribution holidays if these are permitted by the rules of the scheme.

• Whether the payee was terminated during the pay period.

  The rules of the share scheme determine how terminated payees' contributions are processed. There are three options: process the contribution as normal, process the contribution only if the payee left on the last date of the pay period, or do not process contributions.

• Whether payees' pay is sufficient to process the full contribution.

  The system checks the GBR AC NETT SEG accumulator to determine whether there is sufficient pay to deduct the full contribution amount. The rules of the share scheme defined on the Define Share Schemes GBR page determine what happens when net pay is not sufficient to take the full amount. There are two options: deduct zero, or deduct the maximum amount available.

• Total contributions are within the statutory limits.

  When you set up payees' contributions, the system checks that the amount is within the limits defined for the scheme. However, when you process payroll, the system also checks that the total contributions are within the HM Revenue and Customs (HMRC) limits for share save and buy schemes defined on the Share Scheme Limits GBR page. If the total contributions exceed statutory limits, the system does not process the contribution that would exceed the limit.