KnowledgeBase

12103: What are insufficient earnings? AE FAQs

Was this useful?
Yes No
Article ID 12103
Article Name What are insufficient earnings? AE FAQs
Created Date 27 Feb 2019 00:00:00
Product IRIS PAYE-Master, IRIS Payroll Business, IRIS Bureau Payroll, IRIS GP Payroll, IRIS Payroll Professional, Earnie, Earnie IQ
Codes: GGLEARNIE GGLENIEIQ GGLBURPAY GGLGPPAYROLL GGLPAYEMST GGLPAYBUS GGLPAYPRO
Problem

Some of the employees in my Pension export are listed as having insufficient earnings, what does this mean? 

Resolution

An employee listed as having insufficient earnings is being paid below the level at which AE contributions will be taken.


That is the combined "Qualifying Earnings" for the employee fall below the "Lower Earnings Limit". In this situation employees' who have previously been enrolled will make no contributions for the period as they aren't being paid enough. They will remain enrolled in the scheme, and, if their earnings increase in future periods, above the Lower Earning Limit, pension contributions will then be taken.


For the tax year 2019/20 the Lower Earnings Limit for each pay frequency is:


Weekly: £118
2-Weekly: £236
4-Weekly: £472
Monthly: £512
Annually: £6,136


If you are using the Calculation basis "Qualifying (banded) Earnings" for automatic enrolment, your payroll software will automatically apply the lower limits listed above.


If you are using the calculation basis "Pensionable Earningsfor automatic enrolment, your payroll software WILL NOT apply the lower limits listed above. Instead, it will calculate the percentage contribution based on the sum of pensionable earnings without applying the lower or upper limits.


If you are unsure which calculation basis you should use you will need to confirm this with your pension provider.

Was this useful?
Yes No

FRS 102: Ending confusion about non-distributable profits

FRS 102 - The Financial Reporting Standard applicable in the UK...

Read more
Related content

IRIS Help Centre

For comprehensive and searchable product information, visit our IRIS Help...

Read more
IRIS on Twitter IRIS blog IRIS on LinkedIn IRIS on YouTube