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What are the earnings thresholds for Auto Enrolment pensions?

Article ID
11427
Article Name
What are the earnings thresholds for Auto Enrolment pensions?
Created Date
27th February 2019
Product
IRIS PAYE-Master, IRIS Payroll Business, IRIS Bureau Payroll, IRIS GP Payroll, IRIS Payroll Professional, Earnie, IRIS Earnie IQ
Problem

What are the earnings thresholds for Auto Enrolment pensions?

Resolution

If the employee earns more than the minimum earnings threshold shown below and are not currently in a qualifying pension scheme they will be auto enrolled (tax year 2019/20):

If the employer is using the type ‘Percentage Auto Enrolment’ for pension deductions they will then pay on the banded earnings basis, where contributions are based on the employee’s earnings within the LEL (lower earnings limit) and the UEL (upper earnings limit).

NOTE: As per the 19/20 tax year, the total minimum contribution is 8% with 3% minimum EMPLOYERS contribution. If your pension provider claims tax relief for employees, effectively you deduct 4% and the remaining 1% is claimed by the scheme provider for the total 5% employee contribution.

DateEmployer minimum contributionTotal Minimum contribution
Staging Date – 05/04/181%2% (including 1% staff contribution)
06/04/18 — 05/04/192%5% (including 3% staff contribution)
06/04/19 onwards3%8% (including 5% staff contribution)

You and/or your staff can pay more than the minimum, see contributions and funding information from the pension regulator.

For further automatic enrolment queries check our guides and FAQs here.

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