Smarter accounting

Auto enrolment minimum contributions

18 February 2015, Auto Enrolment, Charities, Companies, Employer, Sole Traders

 Employer and employee contributions

From an employer’s staging date, they are required to provide a pension scheme and monitor the pay of workers according to thresholds set by legislation.

Employer contributions of 1%, rising to 3% must be paid into a pension scheme on earnings between the lower level of qualifying earnings and the upper level of qualifying earnings.  The first table below shows the auto enrolment minimum contributions for both the employer and employee.  The employer can opt to pay the total contributions if it chooses, but in most cases the employee will have their deduction made automatically from their pay.

Pension contributions as a percentage of qualifying earnings

DateEmployer minimumEmployee minimum / Employer additionalTotal
Employer's staging date to 5 April 20181%1%2%
6 April 2016 to 5 April 20192%3%5%
6 April 2019 onwards3%5%8%

The Automatic Enrolment (Earnings Trigger and Qualifying Earnings Band) Order 2015 draft legislation sets out the proposed thresholds for qualifying earnings in 2015/16.  Anyone above the lower threshold has a right to auto enrolment minimum contributions of 2% (1% employer) rising to 8% (3% employer) based on qualifying earnings.

Qualifying Earnings Thresholds for Auto-Enrolment

2019 - 2020Annual1 weekFortnight4 weeks1 month1 quarterBi-annual
Lower level of qualifying earnings£6,136£118£236£472£512£1,534£3,068
Earnings trigger for automatic enrolment£10,000£192£384£768£833£2,499£4,998
Upper level of qualifying earnings£50,000£962 £1,924£3,847£4,167£12,500£25,000

Qualifying Earnings Thresholds for Auto-Enrolment 2020-21

2020-21Annual1 weekFortnight4 weeks1 month1 quarterBi-annual
Lower level of qualifying earnings£6,240£120£240£480£520£1,560£3,120
Earnings trigger for automatic enrolment£10,000£192£384£768£833£2,499£4,998
Upper level of qualifying earnings£50,000£962£1,9244£3,847£4,167£12,500£25,000

Alterledger can manage your auto-enrolment process

You will need to assess your workforce every pay period, with severe penalties if you fail to act properly.  This can be a complicated process and should be managed together with your general payroll procedures.  Alterledger can deal with all your payroll and auto-enrolment needs and save you time and money to spend on your own business.  Please get in touch using the form below for more information.

 

Website by Haiwyre