You must include all of the annual pay elements listed below when working out an individual's gross earnings, if they are likely to be in receipt of them.
The law has set a minimum level for employer contributions – this is 1% until 6 April 2018. The calculation example below uses the minimum contribution levels, and contributions are calculated based on earnings between a lower and upper threshold.
|Your employer contribution||1%||£|
|Staff member minimum contribution||1%||£|
|Total minimum contribution||2%||£|
How we've worked this out
The minimum contribution level for the current tax year is a total contribution of 2% (with at least 1% of that contributed by the employer). The minimum contribution level is calculated based on pensionable pay between £5,824 and £43,000 per year (anything they earn above £43,000 isn't taken into account when working out how much contributions should be for that person).
- The minimum contribution levels are being phased in, building up to 8% by 1 October 2018.
- There will be other costs that are not included in this tool, such as implementation costs for your business or the pension scheme's annual management fees and administrative charges. In addition, the pension scheme you choose may calculate contributions differently.
This tool is for information purposes only. We are unable to show you exactly how much you'll have to pay as it will be determined by the pension scheme you choose.