WHAT DO YOU HAVE TO DO?
WHEN DO YOU HAVE TO DO IT BY?
WHO DOES IT AFFECT?
HOW MUCH DO YOU HAVE TO CONTRIBUTE?
WHY CHOOSE FSB WORKPLACE PENSIONS?
WHERE DO YOU GET STARTED?

Both you and your employees can contribute towards their pension. The new employer duties mean that you will need to make a minimum level of contribution defined in the legislation.

The minimum contribution levels are being phased in gradually over the next few years to help employers comply with the new law.

What are Qualifying Earnings?

Qualifying earnings are generally the default choice of contribution basis for auto enrolment.

For the tax year 2017/18, this is the amount earned between £5,876 and £45,000. This means that the first £5,876 of a persons wage is not subject to a pension contribution calculation.

It includes an employees basic salary, bonus, overtime and commission as well as statutory sick, maternity, paternity and adoption pay. However, any Benefits in Kind / P11D benefits do not need to be included e.g. Car/Fuel Allowance, Gratuities etc.

These figures will be reviewed every year by the government.

 

What will the Contributions be?

The minimum levels of contributions and phasing dates for qualifying earnings are:

new_contribution_graph

Contribution Bases

On top of Qualifying earnings, Employers have a choice of 3 other bases that they want contributions to be based on, these are, Basic Pay (Tier 1), Basic Pay (Tier 2) and Total Pay. An employer selecting any of these different bases will need to complete a certification of that basis and renew that certificate every 18 months.

Click here for more information from the Pensions Regulator – Certification can be found on Page 22, paragraph 67

The three other contributions basis are detailed below, or you can download our Contribution Levels Guide for more information.