The next increase in Automatic Enrolment (AE) pension contributions for both employees and employers will take place from 6 April 2019.

The minimum employer contribution will increase from two per cent to three per cent, while the employee contribution will rise from three per cent to five per cent – taking the total minimum contribution from five per cent to eight per cent.

The minimum contribution only applies to employees earning £10,000 a year or more and percentage contributions will be calculated using only the employee’s earnings between £6,136 and £50,000 from April. This is an increase from the existing income threshold of £6,032 to £46,350.

For the purposes of AE pension contributions, earnings include:

  • Salary
  • Wages
  • Commission
  • Bonuses
  • Overtime
  • Statutory sick pay
  • Statutory maternity pay
  • Ordinary or additional statutory paternity pay
  • Statutory adoption pay

It is important to ensure that your payroll processes take account of the changes, as the penalties for non-compliance can be steep.

Link: Increase of automatic enrolment contributions

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Jill Wernham

Jill Wernham

Senior Payroll Manager at Smailes Goldie

If you need any further information or support on these changes please speak to Jill Wernham our Senior Payroll Manager.

Jill Wernham

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