How can you add net pension §53A in Salary?
Salary offers the option to add net pension in order for you to pay out pension according to Danish Pension Taxation Act §53A. Before you can add it, you will need to activate the setting. Go to Company -> Advanced:
Scroll down to Pension and enable Allow net pay pension:
Once activated (and changes are saved), you can go to Employees -> Select a specific employee -> Emplotment -> Pension. Here you can add Net pension:
Then click Save changes.
When net pension has been added, it may look like this on the payslip:
The employee's contribution is net (after tax) and therefore it is deducted from the net salary.
The employer's contribution is added gross (before tax) therefore the tax will be deducted from the amount and the difference is transferred to the selected pension fund. In the example above, 5.000 kr. have been added as the employer's contribution. After taxes, the employer's contribution amounts to 2.070 kr. which will then be transferred to the pension fund.
What is net pension, §53A?
Usually, both employee and employer contributions to the pension scheme are tax-free upon deposit, but then taxed upon withdrawal. However, the opposite applies to net pensions according to the Danish Pension Taxation Act §53A. Upon deposit, your personal tax allowance cannot be applied, but the withdrawal is tax-free.
The Danish Pension Taxation Act mentions nine cases in which you are entitled to net pension. If you are in doubt whether or not you have the right to receive net pension, you should contact your pension fund or pension administrator.