Automatic Enrolment With HMRC's Basic PAYE Tools

Employers using HMRC's Basic PAYE Tools can ensure that they are compliant with their auto enrolment duties by using Smart Pension to carry out employee assessments and calculate pension contributions for free.

How Smart Pension works with HMRC's Basic PAYE Tools

What is HMRC's Basic PAYE Tools?

HMRC basic paye tools Basic PAYE Tools is a payroll software provided by HM Revenue and Customs (HMRC) and is designed for small businesses with fewer than 10 employees. It's an attractive choice for many, and one of the most popular amongst SMEs, as it is completely free to use.

Can HMRC's Basic PAYE Tools be used for automatic enrolment workplace pensions?

Unfortunately HMRC's Basic PAYE Tool isn't compatible with the new employer duties associated with automatic enrolment. The software doesn't allow users to assess which of their employees to automatically enrol or help users to calculate pension contributions for their employees.

Employers using HMRC's Basic PAYE Tools will need to carry out both the employee assessment and the calculation of pension contributions, and then ensure the amounts entered are correct. Along with it being a challenging and time-consuming task which will need to be repeated at every pay period, there is a risk for employers who choose to assess their employees and calculate employee pension contributions manually. Errors can very easily occur which could lead to unintentional non-compliance and ultimately fines being issued by The Pensions Regulator.

Can pension assessment and contribution calculations still be done for automatic enrolment workplace pensions whilst using HMRC's Basic PAYE Tools?


Employers who want to continue to use HMRC's Basic PAYE Tools for payroll can use Smart Pension for their auto enrolment duties. Smart Pension is compatible with HMRC's Basic PAYE Tools meaning it can be used to assess employees in order to calculate their worker category and decide whether or not they should be automatically enrolled into the workplace pension scheme, and also to calculate employees' pension contributions to be deducted from pay, something many pension providers on the market do not currently offer.

This is a great option for employers, particularly those that don't have the financial resource to spare, who are reluctant to switch from using the current free Basic PAYE Tools over to a payroll software solution which they will have to pay to use.

How does Smart Pension work with HMRC's Basic PAYE Tools?

Built into every Smart Pension account is a free assessment and pension calculator. Once the employee details have been uploaded, the Smart Pension platform will run the calculations and produce a report with the relevant assessment results along with the pension contributions to be deducted. This can then simply be downloaded as a CSV for employers to use with their payroll software.

For more details on using a basic payroll package with Smart Pension, including step by step videos click the button below.

Looking for another way to calculate pension contributions?

playlist_add_check Pre-Assessed Payroll (Papdis)

Many payroll products now have built in support for assessment and calculating pension contributions. This information can be exported as a CSV file using the Papdis format into your Smart Pension account.

send One-Click/API Payroll

More advanced payroll products have integrated directly with our API meaning you can assess your staff, calculate and submit their pension contributions all within your payroll software.

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