Contribution checks
We’re introducing additional checks to help you remain compliant with the legal minimum contributions for auto enrolment when you submit your employee data.
Legal minimum contributions
We’re introducing additional checks to help you remain compliant with the legal minimum contributions for auto enrolment when you submit your employee data through your Online Services account.
We already have checks in place, but these latest changes will give you an extra layer of protection and peace of mind. We’ll work out your contributions by using the settings in your worker groups against the pensionable earnings you’ve provided.
What’s changing?
We’ll give you instant feedback on your contributions if there are any issues, so you can address them straightaway.
We’ll check all your employee data to ensure you’re meeting the legal minimum contributions or the contributions you’ve contractually agreed with your employees.
If your contributions fall short of the minimum or what you’ve contractually agreed, we’ll let you know what needs correcting.
Common questions about contribution checking
Do our contributions need to be exact or is there some flexibility?
We’ll have some flexibility for rounding purposes.
For example: ‘Pensionable Earnings Per PRP’= £1,249.87
- You’ve set your employer contribution percentage as 3% and your employee contribution percentage as 5% in your worker group.
- Employer contribution= £1,249.87 x 3%= £37.4961= £37.50
- Employee contribution= £1,249.87 x 5%= £62.4935= £62.49
We can offer you support on how to calculate your contributions but ultimately the earnings and contributions supplied to us will need to be correct to ensure you’re compliant. As the employer, you are responsible for ensuring your contributions are assessed and paid correctly.
You can read more about pensionable earnings in our knowledgebase.
Is it OK if we pay more than the contribution percentages set out in the worker group(s)?
Yes, if contributions are above the percentages outlined in your worker groups, you won’t receive any feedback on your contributions. We won’t stop your file being uploaded.
If contributions are consistently based on the higher percentage for all employees in the worker group, you may wish to adjust your worker group and payroll percentages to reflect this.
If the contributions are consistently based on the higher percentage for some employees in the worker group, you may wish to create a new worker group for those employees.
You can read more about worker groups in our knowledgebase.
Is it OK if the employer contributions exceed the earnings figure on the file?
As the employer contribution on the file is coming from a percentage of the ‘Pensionable Earnings Per PRP’, we wouldn’t expect the contribution to be more than 100% of the ‘Pensionable Earnings Per PRP’.
If you’re submitting a one-off bonus, you should be updating your ‘Total Earnings Per PRP’ column to include this bonus. In this case, you may end up submitting more than the ‘Pensionable Earnings Per PRP’.
Is it OK if the employee contributions exceed the earnings figure on the file?
As the employee contribution on the file is based on a percentage of the ‘Pensionable Earning Per PRP’, we wouldn’t expect the contribution to be more than 100% of the ‘Pensionable Earnings Per PRP’.
Employees can pay as much as they like into their pots, but there are limits on how much tax relief they can receive. If they’re under 75, they’re eligible to pay in up to 100% of their UK taxable earnings or £3,600 gross (whichever is higher) and receive tax relief on their contributions. The value of the tax relief depends on their individual circumstances.
The annual allowance is the maximum they can pay into all of their pension plans combined before a tax charge applies. For 2024/2025 tax year the annual allowance is £60,000 or 100% of their income if they earn less than £60,000.
The annual allowance is reduced to £10,000 (for the 2024/2025 tax year), known as the Money Purchase Annual Allowance, if a member has taken a taxable amount out of their pension (eg using UFPLS or FAD). They can still make contributions to a pension and earn tax relief up to HM Revenue & Customs (HMRC) limits.
I want to make an adjustment for previous overpayments. Can I do this by subtracting the overpayment from my next file?
We’ll no longer be able to support contributions adjustments in this way, as this will trigger contribution feedback. If you need to adjust any overpayments, please get in touch with us so we can send you an adjustment form.
I want to make an adjustment for previous underpayments. Can I still add the underpayments to the file?
We’ll no longer be able to support contributions adjustments in this way. If you need to adjust any underpayments, please get in touch with us so we can send you an adjustment form.
We’ve uploaded contributions without any issues for months/years. Why are you introducing these changes now?
We already have checks in place, but these new checks mean you’ll get instant feedback on your contributions so that you can take immediate action to ensure you’re compliant with your legal obligations.
What figure should employers provide in each column?
The pensionable earnings column should include the earnings from which the contributions are calculated. Contributions are calculated using the percentages of your worker groups in the Employer Online Portal.
The total earnings column should include the gross salary (including overtime, bonuses, etc).
How do you check the contributions?
Our check will ensure that both the employer and employee contribution are equal to or greater than what’s expected based on the figure provided in the ‘Pensionable Earnings Per PRP’ column and the percentages in the worker group.
You can also find more information on pensionable earnings and worker groups in our knowledgebase.
Still have a question?
If you’ve read the FAQs and still need help, call us on 0333 230 1306.
Further information from The Pensions Regulator
You’re legally required to make minimum contributions set out by The Pensions Regulator. We’ve introduced these additional checks to help you to do this. It’s a vital extra layer of protection. You can find more information on The Pensions Regulator website: