Earnings between amounts that are set each tax year by the government that have an upper and lower level. Contributions aren’t calculated on anything under the lower level or above the upper level of qualifying earnings. It’s made up of the following pay components: salary, wages, commission, bonuses, overtime, statutory sick pay, statutory maternity pay, ordinary or additional statutory paternity pay, and statutory adoption pay.
For more information, visit What are qualifying earnings?
- However much of your qualifying earnings fall between £6,240 and £50,270, that’s where the contributions you and your employer make will be calculated from. (Those are the figures for the current tax year – they’re reviewed every year by the government.)
- Let’s say you earn £25,000.
£25,000 minus £6,240 leaves £18,760.
So your contributions will then be calculated from £18,760 – either at the government’s minimum percentages or at higher percentages if your employer chooses.