Tier rates (T2)
Which tier rate should we note on the end of year payment template if the underpayment spans 2 tier rates for each period?
You should enter the October - March tier rate on the payment template. Please note if a practice makes a Year End payment for a Partner’s pensions contributions, the contributions will be allocated to March 2023 on the Partner’s record.
This means the contributions related to the payment must be included in the October – March tab of the 2022/23 Type certificate.
Is the tier rate for 12 months or 6 months?
During 2022/23, the tier rates for Employee contributions changed from 1 October 2022, meaning there are two separate tier rates and there is a requirement to apportion pensionable earnings between two separate periods:
- 1 April 2022 to 30 September 2022
1 October 2022 to 31 March 2023
Due to this change, the tiered employee contribution rates for each 6 month period are shown separately on the 2022/23 Type 1 and Type 2 forms.
NHS Pension Regulations state that the two periods must be annualised separately:
- 1 April 2022 to 30 September 2022 – 183 days
1 October 2022 to 31 March 2023 – 182 days
NHS Pensions have published guidance to accompany the forms and annualisation calculator on their website.
For 2022/23, my employer didn’t change the rate until November rather than October, what do I do?
PCSE will calculate whether the practice has paid the correct level of contributions for the year when they process your form.
If any adjustment is required in relation to an over or under payment this will be applied to the practice's next contractual statement.
You will need to check separately with the practice if the correct level of contributions has been deducted from your monthly salary via payroll.
How do I determine my tier rate if my income has changed over the year?
If you have been continuous practitioner employment for the full year, your tier rate is based on your total pensionable pay for the year, for example, the sum of all your earnings for the 12 months.
If you have had any gaps in practitioner employment, you need to use the annualisation calculator to determine your tier rate.
What do I do if I have paid the wrong tier rate on the Locum A and B forms I have submitted?
PCSE will calculate whether you have paid the correct level of contributions for your locum work for the year when they process your Type 2 form and will let you know whether there is any shortfall you need to make payment for or any overpayment that needs to be refunded to you.
Does it matter if as a locum I have not been consistent in which tier rate I have selected on my form a/b?
PCSE will calculate whether you have paid the correct level of contributions for your locum work for the year when they process your Type 2 form and will let you know whether there is any shortfall or overpayment to be corrected.
What happens when there are different Tiers for the same year? For example salaried GP at 9.2% and SOLO GP at 13.5%.
PCSE will calculate whether you have paid the correct level of contributions for the year when they process your Type 2 form and will let you know whether there is any shortfall or overpayment to be corrected.
How do I determine my tier rate if my income has changed over the year?
Your tier rate is based on the total pensionable pay for the year.
If you changed role, increased salary or hours, this may have impacted your tier rate.
What income should be included to calculate my tier rate?
Income from all practitioner roles you held in the pension year, including solo and locum work should be included to calculate the correct tier rate.