The following contribution changes for auto enrolment have been announced for the 2017/18 tax year. These cover auto enrolment schemes that have contributions based on qualifying earnings. Qualifying earnings are the band of earnings that can be used to calculate auto enrolment contributions. For the 2017/18 tax year this is between £5,876 and £45,000. The government will review these figures annually.
Tena Wallace, HR and Payroll Director, Visionary Accountants, St Albans said:
'The important point to note about qualifying earnings is that it includes not only a worker’s salary or wages but overtime, bonuses, commission, adoption pay, statutory sick pay, maternity or paternity and holiday pay. For any eligible employee earning between £5,876 and £45,000 you will contribute a percentage of their gross annual earnings. As contributions are made at every pay day you will need to work out qualifying earnings every pay day on a pro rata basis. The table below shows the upper and lower levels of qualifying earnings for some common pay periods. For more information about contributions please visit The Pensions Regulator website.’
|Pay Period||Lower level of qualifying earnings||Upper level of qualifying earnings|
|weekly and tax weekly||£113||£866|
|Monthly and tax monthly||£490||£3,750|
Below are the minimum contribution rates calculated using qualifying earnings to establish auto enrolment contributions. The legal minimum contribution rates may vary as it depends on what part of a member’s earnings you use to calculate contributions.
|Date||Minimum contributions (as a percentage of worker's qualifying earnings)|
|Staging Date to 5 April 2018||Minimum contribution 2 per cent. The employer must pay at least one per cent of this|
|6 April 2018 to 5 April 2019||Minimum contribution: 5 per cent.
The employer must pay at least 2 per cent of this.
|6 April 2019 onwards||Minimum contribution 8 per cent. The employer must pay at least 3 per cent of this.|
Tena Wallace added: ‘If your company is due to auto enrol contact us on 01727 730550 as Visionary Accountants offer a fully managed affordable auto enrolment and workplace pension solution for your business. The new auto enrolment legislation will place greater administrative and legislative burden on your in-house payroll so now is also a good time to consider outsourcing your payroll. At Visionary Accountants we have an experienced payroll team and can offer a cost effective payroll package for your business. We manage payroll for small and medium sized businesses across a range of different industries. Call us for a FREE initial one hour consultation to discuss your payroll or auto enrolment requirements.’