How do I process a refund of pension premium to an employee?

  • Modified on: Tue, 15 May, 2018 at 12:16 PM

This situation might occur when an employee is leaving the company and there is no pension plan yet, but pension premium has been deducted in the payroll.

You can use the standard pension codes 580 and 590 by setting them on 'fixed amounts' and to enter the amounts that have to be refunded. 

However, if you return more employee premium than has been deducted this year (for example including pension premium of older years), this will result in a negative employee pension premium contribution in the Summary Wage Sheet (in Dutch: Verzamelloonstaat), which might be a reason for the Tax Authorities to refuse this file or document while you try to file or upload it online.

Therefore it is better to process a refund of employee pension premium in a wage code as some kind of payment, for example in a duplicate of wage code 80 named 'Refund Employee pension premium contribution'. In that case this refund will end up in the Summary Wage sheet debit/positive under 'taxable wage' and not credit/negative under 'Employee pension contribution'.

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