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Why would I need to align worker group earnings periods with the tax year?

An earnings period, also known as a pay period, is how often you pay your workers. For example, this could be monthly or weekly.

You may need to align your scheme to tax periods if you’re using payroll software such as Sage that’s set up in this way. You may also want to use tax periods if your organisation’s payroll is calculated on a tax monthly basis.

When you add a new worker group or copy an existing group you’ll be asked how often you want to pay contributions. Please see How do I add a new group once I’ve set up with Nest? for more information. You’ll need to choose the payment frequency and then let us know when your current earnings period is due to end.

You can align your pay periods with the tax year by selecting a tax monthly or tax weekly payment frequency.

For example, if you’re setting up monthly contributions you should set the payment frequency as tax monthly this will automatically align the pay period to end on the fifth day of the month because the tax year ends on 5 April.

If you’re setting up a weekly pay period you should select tax weekly to end on a Friday, because 5 April 2024 was a Friday and the tax weeks run from Saturday to Friday. If you’re to setting up fortnightly or four weekly pay periods you’ll have to select the pay period from Saturday to Friday, because 6 April 2024 was a Saturday. If you set them to end on a Friday then they’ll be aligned with the tax year.

This guidance applies to the 2024/25 tax year. At the end of the tax year you’ll have to create a new group for weekly, fortnightly and four weekly pay periods based on the day of that week that 6 April falls on and transfer your workers to that group. You won’t have to create a new group at the beginning of every tax year if you use tax monthly pay periods.

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