The next increase in Automatic Enrolment 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 are calculated using only the employee’s earnings between £6,136 and £50,000. This is an increase from 2018’s income threshold of £6,032 to £46,350.
For the purposes of Automatic Enrolment pension contributions, earnings include:
- 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.
Our expertise in payroll and pension compliance means we can help your company understand the latest workplace pension regulations. To find out how Milsted Langdon can help with your payroll or pensions requirements, please contact us.