My employee receives both a basic salary and a discretionary bonus. Is the basic salary used when calculating both employer and employee contributions. Would contributions be based on the bonus?

This depends on the definition of pensionable salary you’re using to calculate the contributions, and whether this includes bonuses. However, you must include bonuses if your definition of pensionable salary is either total earnings or qualifying earnings.

 

More…

For more information, see www.thepensionsregulator.gov.uk/docs/detailed-guidance-4.pdf.

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