Log into Online Services to review and make updates to your worker groups.
Earnings basis & contributions support hub
Find out what you need to do in your worker group settings to make sure you’re meeting your legal obligations.
Start with our video: what’s changed, why, and what to do
We’ve made improvements to Online Services to make it easier for you to meet your obligations. The Pensions Regulator (TPR) requires us to monitor this.
On this page, you can:
- Refresh your knowledge on earnings basis types
- See what changes we’ve made to Employer Online Services
- Find out what you need to do next
If you need to make changes to your worker group settings, we’ll prompt you, once you log in to Online Services.
Next, 3 key definitions you need to know
What is an earnings basis? Your earnings basis describes the type of pay used when pension contributions are worked out. The types of pay you use will make up your pensionable earnings figures.
What is basic pay? Includes all earnings in an employee’s basic salary. It also includes statutory sick pay, statutory maternity pay, ordinary or additional statutory paternity pay, and statutory adoption pay.
What is total pay? Includes basic pay, and any commission, bonuses, or overtime. This list is not exhaustive, and employers may include other types of pay.
Now, earnings basis types at a glance
| Earnings basis type | Uses at least basic pay | Uses total pay | From first £1 earned | Minimum contributions Employer | Total |
|---|---|---|---|---|
| Qualifying earnings | ☓ | ✓ | ☓^ | 3% | 8% |
| Set 1: Pensionable earnings (basic pay) | ✓ | ☓ | ✓ | 4% | 9% |
| Set 2: Pensionable earnings (85%) | ✓* | ☓ | ✓ | 3% | 8% |
| Set 3 Total earnings | ☓ | ✓ | ✓ | 3% | 7% |
*Set 2: Pensionable earnings (85%) – when combining all employees using this set (including all employees you’re certifying for), the average basic pay must always make up at least 85% of the average total pay.
^ Qualifying earnings is worked out using total pay but only between the £6,240 and £50,270 thresholds (for the current tax year).
What you need to do next
Now you understand the different earnings basis types, it’s time to follow the steps below to review and update your worker group settings in Online Services.
Certification
If you use Set 1, 2 or 3, you must complete certification, store this on file, and redo it at least every 18 months.
Qualifying earnings
No change to earnings basis type.
| Earnings basis type | Pay you must include | Minimum contributions ~ employer | total* |
|---|---|---|
| Qualifying earnings | Worked out using total pay but only between the £6,240 and £50,270 thresholds. | 3% | 8% |
What you need to do
Login and update worker group settings.
- Check you still want to use this basis.
- That you’re including the correct pay
- Input contribution percentages that are at least the minimum required
- If you have worker groups you no longer use, untick the group ‘Is Active’ box in the settings
Pensionable earnings
You now need to select either:
- Set 1: Pensionable earnings (basic)
- or Set 2: Pensionable earnings (85%)
| Earnings basis type | Pay you must include | Minimum contributions ~ employer | total* |
|---|---|---|
| Set 1: Pensionable earnings (basic) | Worked out using at least basic pay. Contributions from first £1 earned – no thresholds | 4% | 9% |
| Set 2: Pensionable earnings (85%) | Worked out using at least basic pay. When combining all employees using this set (including all employees you’re certifying for), the average basic pay must always make up at least 85% of the average total pay. Contributions from first £1 earned – no thresholds. | 3% | 8% |
What you need to do
Login and update worker group settings.
- Check you still want to use this basis
- That you’re including the correct pay
- Select either Set 1 or Set 2
- Input contribution percentages that are at least the minimum required
- If you have worker groups you no longer use, untick the group ‘Is Active’ box in the settings
Total earnings
You now need to select Set 3: Total earnings.
| Earnings basis type | Pay you must include | Minimum contributions ~ employer | total* |
|---|---|---|
| Set 3: Total earnings | Worked out using everything an employee is paid.Basic pay, plus all other earnings. Contributions from first £1 earned – no thresholds. | 3% | 7% |
What you need to do
Login and update worker group settings.
- Check you still want to use this basis
- That you’re including the correct pay
- Select Set 3
- Input contribution percentages that are at least the minimum required
- If you have worker groups you no longer use, untick the group ‘Is Active’ box in the settings
Payroll software
It’s important to make sure that your worker group settings match up with the settings in your payroll software (if you use one).
Your questions, answered
What are the differences between Set 1 and Set 2 pensionable earnings
How are they alike?
Set 1 and Set 2 are both worked out using at least basic pay. Contributions are made from first £1 earned and unlike qualifying earnings, there are no thresholds. Both sets must be certified at least every 18 months.
How do they differ?
Set 1: Pensionable earnings (basic): minimum contributions are employer: 4% | total: 9%.
Set 2: Pensionable earnings (85%): minimum contributions are employer: 3% | total: 8%. It’s important that you monitor this and can demonstrate you are complying with the 85% rule – The Pensions Regulator (TPR) may check this.
The 85% rule means that when combining all employees using this set (including all employees you’re certifying for), the average basic pay must always be at least 85% of the average total pay.
How are Set 3: Total earnings worked out?
Set 3: Total earnings is worked out using everything an employee is paid. It includes basic pay, plus all other earnings (including commission, bonuses and overtime). Contributions are from first £1 earned with no thresholds, like qualifying earnings.
Wy do I need to certify and what do I need to do?
If you use any of the earning basis sets (1, 2 or 3) you must certify (separate to re-enrolment). After you’ve completed certification , you should store this on file, and redo it at least every 18 months. TPR might ask you for a copy, so make sure you keep it up to date.
The form provides evidence to TPR that you are complying with the earnings definition that you have chosen, meaning you’ll always be sure you’re paying the right amount.
Why can’t I submit my employee data
Employers have been given until the end of April 2024 to review and update any necessary changes to their worker group settings.
If you haven’t made these changes by the end of April 2024 you will not be able to submit employee data, but don’t worry, we’ll give you plenty of warning before this date.
It is important to make this a priority because after this date, the ‘submit employee data’ button in Online Services will be greyed out until the changes have been made.
There is a warning (!) against worker groups I no longer use. How do I remove these.
Online Services will check every worker group in your account that is active, even if you no longer use that worker group.
If you’ve no intention of using the worker group, the simplest way to fix this is to click the ‘Edit’ button to see your settings. Then, untick the box that says, ‘Is Active’.
The warning (!) should now disappear. Please note that you’ll only be able to untick this box if there are no employees currently in this worker group.
There is a warning (!) against the earnings basis on my worker groups, how do I remove these?
Some of the earnings basis types in Online Services have changed. You will need to click the ‘Edit’ button to see your settings. Then, select one of the new earnings basis types. The warning (!) should now disappear.
Here’s a reminder of what’s changed. Please check the earnings definitions to ensure you have chosen the correct basis for this worker group.
Qualifying earnings – no change but check the earnings definitions to ensure that this basis is still correct.
Pensionable earnings – you now need to check the earnings definitions and, where appropriate, select either ‘Set 1: pensionable earnings’ or ‘Set 2 (85%): pensionable earnings’.
Total earnings – you now need to check the earnings definitions and, where appropriate, select ‘Set 3: total earnings’.
Why are worker groups important
Employers use worker groups to categorise their employees into different groups. Each group might use a different earnings basis or a different contribution percentage, for example.
We use the worker group settings you enter to work out what contributions we expect to receive for each employee and ensure they meet the legal minimum requirements. Your employees will also see these settings on their joiner information.
How do I add a new / another worker group
Head to the ‘Manage worker groups’ page in Online Services. Then, click ‘add new worker group’. You’ll then need to input all the mandatory fields within the worker group settings, making sure you’re meeting the minimum contribution percentages required.
If you’re not sure, you can click the ‘?’ symbol in Online Services to the right of the field for more information. (link to EOS guide).
What are the minimum contribution percentages for the earnings basis I use?
Each earnings basis has its own legal minimum contributions. Contribution percentages that are equal to or greater than these:
Qualifying earnings: employer: 3% | total: 8%
Set 1: Pensionable earnings (basic): employer: 4% | total: 9%
Set 2: Pensionable earnings (85%): employer: 3% | total: 8%
Set 3: Total earnings: – employer: 3% | total: 7%
Why are you changing the way you check contributions
We’re introducing these improvements to Online Services so that we can better help you to meet your legal obligations relating to minimum employer and total contribution percentages.
We’ll use your worker group settings to check the data you’re submitting. It’s important that your worker groups are accurate, match up with your payroll software settings (if you use one), and are kept up to date.
If your payroll software is managed by a 3rd party, you may need to make them aware of any changes you have applied to your TPP worker group settings.
What to do next
If you still need help
Head over to our earnings basis and contribution hub for more support.