Can employees and/or employers pay more than the legal minimum contribution?

Both employers and employees can choose to contribute more than the legal minimum contributions.

There is no minimum contribution level for employees, so if the employer chooses to pay the full total minimum contribution level, then the employee could choose not to contribute.

However, even if the employee increases their contribution, the employer must still meet the minimum employer contribution.

Tax relief on pension contributions

There can be tax implications to this for both the employer and employee. Employees should be aware of the annual allowance – the maximum amount that can be paid into their pension with tax relief. Read more about this on our website.

To do this you can add the employee to a new worker group with higher rates of employee and employer contribution amounts.

When did the minimum contribution increase?

The minimum contributions were introduced in 3 stages known as phasing.

If the qualifying earnings basis is being used, the minimum contribution until 5 April 2018 was 2% with at least 1% from the employer.

Between 6 April 2018 and 5 April 2019 the minimum contribution was 5% with at least 2% from the employer and from 6 April 2019 the minimum contribution has been 8% with at least 3% from the employer.

For more information see The Pensions Regulator contribution levels guidance

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