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Salary and Commission payments

charlenebbcharlenebb Settling In NicelyRegistered Posts: 38
I pay 12 members of staff on payroll of which one has commission. This commission is shown separate on the payslip e.g Basic pay and Commission pay. The employee has asked the director If both salary and commission can be shown together as Basic?
This would affect the pension as pensions are worked out on basic salary only. Is there any other reason I can give as to why not to do this or does anyone know any legal reasons not to do this.


  • Bmer82Bmer82 PlymouthFMAAT Posts: 69
    sounds to me that the employee may be looking to show an increased basic to a lender. where commission may be discounted from regular income for affordability checks. by masking the commission various fraud risks follow.

    another quick one from my understanding under auto enrollment commissions form part of pensionable earnings and should form part of the pension calculation anyway at least that is the case with the schemes I have had dealings with.
  • charlenebbcharlenebb Settling In Nicely Registered Posts: 38
    The director can choose to pay pensions on basic salary only. I use Sage 50 and they talked me through the software. The system also allows you to choose what you would like to work out pensions on. I do agree could this be fraud if employee is trying to show he owns more then his basic. What implications are there for the company.
  • Bmer82Bmer82 PlymouthFMAAT Posts: 69
    appreciate that sage allows you to pick and choose as that is a necessary evil with off the self packages but qualifying earnings for assessment purposes includes commission according to the pension regulator guidance. but like I say may be differences in scheme if set up prior to AE.

    re fraud if employee was found out and an investigation launched there is a risk that the company could be examined to establish whether they were complicit in the fraud by providing misleading information to the lender
  • charlenebbcharlenebb Settling In Nicely Registered Posts: 38
    Yes I agree. I can check again with the pension provider that we use as this is an automatic set-up. Yes I agree. Fraud will not look good for the company.
  • BertieBertie West Midlands Registered Posts: 376
    What is written in the employee's contract? Roll with that.

    Workers can and do create all sorts of headaches.

    Always refer to the contract.
  • charlenebbcharlenebb Settling In Nicely Registered Posts: 38
    director and employee are related so you may as well bin the contract as they don't really folllow it
  • BertieBertie West Midlands Registered Posts: 376
    There are no friends in business.
  • charlenebbcharlenebb Settling In Nicely Registered Posts: 38
    its very frustrating as the employee thinks he is the director. He is constantly being told he is not by the real director
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