Workplace pension scheme – how much should I pay?

19th December 2019 Savings and investments CHW Accounting

Employers have to provide a workplace pension scheme for eligible staff as soon as their first member of staff starts working for them.

If you already have a workplace pension scheme which you’d like to use for automatic enrolment, you must ask the provider if it meets the rules.

You must pay at least 3% of your employee’s ‘qualifying earnings’ into your staff’s pension scheme.

It’s advisable to check the pension scheme you’re using to find out what counts as ‘qualifying earnings’ but under most schemes, it’s the employee’s total earnings between £6,032 and £46,350 a year before tax.

Total earnings include salary or wages, bonuses and commission, overtime, statutory sick pay, statutory maternity and paternity or adoption pay.

You must deduct contributions from your staff’s pay each month. You’ll need to pay these into your staff’s pension scheme by the 22nd day (19th if you pay by cheque) of the next month.

You must pay your contributions for each employee by the date you’ve agreed with your provider every time you run payroll and you must backdate any missed payments.

You may be fined if you pay late or don’t pay the minimum contribution for each member of staff.

You must keep records for 6 years of how you’ve met your legal duties for maintaining your pension scheme, including the names and addresses of staff enrolled, when contributions are paid, all requests to join or leave your pension scheme and your pension scheme reference or registry number (PSR)

For more advice please get in contact.

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