On the 6 April 2018 auto-enrolment contributions increased to 2% of earnings for employers and 3% for employees giving a total minimum contribution of 5%. If an employer already pays 5% or more then it may be that the employee will not need to make any contributions, however this will depend on the scheme. It is also possible for both the employer and employee to contribute more than the minimum required by law.
Employers should ensure there software is up to date with the current legislation and calculates the correct pension contributions based on the above changes. If you use the qualifying earnings basis the band is increasing for 2018/19 to £6,032 – £46,350 (annually).
There will be further increases from 6 April 2019 onwards where the total minimum contributions will be 8% and the employer must pay at least 3%.
Chartered Accountant
Carlisle Office
