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12173: When are the AE Pension Rates and Qualifying Earnings Bands to Change?

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Article ID 12173
Article Name When are the AE Pension Rates and Qualifying Earnings Bands to Change?
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

The payroll software is using the AE pension earnings bands from 18/19 for the first period of 19/20.

Resolution

Pension Earnings Bands


 


The bands Qualifying Earnings Lower & Qualifying Earnings Upper change when moving into


the new tax year.


These changes for 18/19 into 19/20 are:



 


 


If the PRP start date is in the 2018/19 tax year, the bands that should be used are


the 2018/19 bands.


 


So for the example below, the qualifying earnings lower limit used for week 1 payroll be £116, the 2018/19 rate, as the PRP start date is in the 2018/19 tax year (01/04/19)


This is correct as per TPR and has not changed from previous tax years.



 


Important Exception: If the employee is a New Starter or has their 22nd Birthday,


their Assessment date will be their Start Date or birthday.  If this date is in the previous


tax year, the qualifying earnings lower limit will be £116. If the date is on or after 6th April, the qualifying earnings lower limit will be £118.


 


Pension Deduction Rates




The pension percentage rate increase is to be actioned from any payroll date on or after 6th April, regardless of any PRP.


 


So again using the example below, the bands used should be 3% (Ers) and 5%(Ees) for week 1 payroll - as the payroll date (12/04/19) is in the 2019/20 tax year.



 


For help uplifting your pension contribution rates please click here.

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