The table below shows the minimum contribution rates for Employers and Staff. Please note these increased on 6th April 2018:
|Date||Employer minimum contribution||Staff contribution||Total minimum contribution|
|Until 5 April 2018||1%||1%||2%|
|6 April 2018 to 5 April 2019||2%||3%||5%|
|6 April 2019 onwards||3%||5%||8%|
The minimum contribution levels are calculated based on pensionable pay between £6,032 and £46,350 per year.
Anything they earn above £46,350 isn’t taken into account when working out how much contributions should be for that person.
To ensure you allow sufficient budget for employer pension contributions use the table above and calculate the amount due on anything earned between £6,032 and £46,350 per year.
For example for someone on £1,000 per week (£52,000 per year) where the employer’s contribution is 2% the production would need to allow £15.52 (46,350-6,032/52*0.02) since the annual salary is above the maximum threshold.
There may be other costs to capture in addition to contributions, such as implementation costs for your organisation or the pension scheme’s annual management fees and administrative charges.