How much do I need to contribute?
The amount you and your employees need to contribute to their workplace pension is being phased in over five years from 2012 to 2017.
The minimum employer contribution will rise from 1% of an employee's qualifying band earnings to 3% during this time. Qualifying band earnings are earnings between £5,715 and £38,185 [1]. They can be made up of a variety of income including salary, overtime, bonuses and sick pay.
How phasing will apply
|
Dates |
Minimum employer contribution |
Minimum total contribution |
|---|---|---|
|
Your staging date – 30 September 2016 |
1% |
2% |
|
1 October 2016 – 30 September 2017 |
2% |
5% |
|
1 October 2017 onwards
|
3% |
8% |
Eventually an overall minimum of at least 8% of qualifying band earnings needs to be paid into an employee's pension. This will be made up of:
- 3% employer contribution
- 4% employee contribution
- 1% tax relief
