Which payment frequency should I select if I have a 4-4-5 payroll?

On a 4-4-5 payroll, workers are paid each month. However, the number of weeks included in their pay each month may be either four or five, depending on how many complete weeks are included in that month.

There are 12 pay periods in the annual 4-4-5 cycle. This means the best fit on our system is the calendar monthly frequency, where you pay contributions based on earnings in an entire month. If you choose this frequency we’ll expect twelve contribution schedules during each year. You can go to How do I set up a pay period? for more information on how to set up a monthly frequency to send contributions to NEST.

The effect of this is that you’ll need to include contributions for all the pay dates that fall within that calendar month.

For example, if in one calendar month you may pay your workers twice. You’ll need to add the pensionable earnings for both payments together and submit the amount in one monthly schedule.

If you do this the actual dates of your pay periods will be different to the dates on the system. You’ll need to watch out for the following:

1. Making sure you pay contributions to NEST by your payment due date. If you don’t complete a schedule and make the payment in time for NEST to receive it by the payment due date we’ll class this as a late payment.

2. Workers or their representatives may ask you to explain why deductions from their wages aren’t being paid to NEST every time they get paid. If they ask to see the payment schedule it will show that payments are being made on a calendar month basis rather than their 4-4-5 pay cycle.

This approach will also have an effect on contribution payments. Please see How will a 4-4-5 payroll affect my contribution schedules? for more information.