Which basis of earnings should I use?

It’s for each employer to decide which basis to use when calculating employee contributions. This decision is likely to be based on your available budget, workforce profile, pay structure and whether or not you’d like to provide benefits above the statutory minimum for your employees.

You also have the option to use one or more of the certification bases, such as pensionable earnings, or qualifying earnings (also known as banded earnings), for all or part of your workforce.

The People’s Pension is unable to advise or recommend which basis to select.

If an earnings basis other than qualifying earnings is selected, self-certification will be required every eighteen months to confirm that the chosen basis meets the minimum requirements.

More…

For more information on choosing an earnings basis, see www.thepensionsregulator.gov.uk/docs/detailed-guidance-4.pdf.

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