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Workplace Pensions

Contributions

The government has set minimum contributions that have to be made each pay period. These contributions are scheduled to increase over time and it is likely that they will increase further in years to come. The intention is to make pensions contributions more manageable by starting with low amounts and increasing them over time. You and your employees can contribute more than these minimum amounts if you wish.

There are four categories of earnings and set minimum contribution levels, from which you can choose. 'Qualifying earnings' is commonly used by most employers. Qualifying Earnings includes: basic salary; overtime, bonus and commission payments; sick pay and parental pay between £5,876 and £45,000 per year (2017/18), or the equivalent for the relevant pay period.

Band ‘qualifying earnings’:

Date

Minimum employer contribution

Minimum total contribution

To April 2018

1%

2%

To April 2019

2%

5%

April 2019 onwards

3%

8%

Tier 1 - 9% of basic pay:

Date

Minimum employer contribution

Minimum total contribution

To April 2018

2%

3%

To April 2019

3%

6%

April 2019 onwards

4%

9%

Tier 2 - 8% of basic pay where basic pay is at least 85% of total pay:

Date

Minimum employer contribution

Minimum total contribution

To April 2018

1%

2%

To April 2019

2%

5%

April 2019 onwards

3%

8%

Tier 3 - 7% of total earnings

Date

Minimum employer contribution

Minimum total contribution

To April 2018

1%

2%

To April 2019

2%

5%

April 2019 onwards

3%

7%

 

 

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