The total minimum contributions that must be paid for all workers automatically enrolled or opted in to your workplace pension increases again from 6th April 2019.
The rates will increase from a total of 5% to a total of 8% going into the pension. From this the employer must contribute a minimum of 3% and by doing this, it would mean the employee therefore has to contribute 5%.
As the employer, you can choose to pay in more therefore, reducing what the percentage amount your employee has to pay in. For example, you could pay 4% and therefore the employee would have to pay in 4%. This is because a total of 8% is going into the pension pot and at least 3% is coming from the employer.
If your pay reference period straddles the 6th April 2019, you will need to pro-rata your calculation.
If you have a pay period of 1st to 30th April.
The contribution for the pay reference period up to 5th April would be calculated based on the old rates, and from 6th April up to the end of the pay reference period would be on the new rates.
We offer a full payroll service to look after your payroll and pension needs, please call us and we can put you in touch with your local TaxAssist Accountant to help.
By Samantha Skyring FCCA
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.