If we’re making an employee redundant do we have to take pension contributions from their redundancy pay?

The tax-free redundancy payment (up to £30,000), ie the lump sum the employee is getting for being made redundant, isn’t counted as pensionable earnings and therefore isn’t subject to pension deductions. What the employee receives in their final period of employment that is their normal taxable pay, will be subject to the same automatic enrolment deductions as normal, ie the same or very similar contribution to what they paid in the previous pay reference period which was a normal salary payment.

For those who wish to use their redundancy pay to make pension contributions, they can do so up to their annual allowance but this would be an employee not employer contribution.

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