What are the cost implications to auto enrolment?
Once your workforce has been assessed and your current pension has been reviewed you are now in a position to calculate what the financial implication will be on your business.
You have two options from which to calculate your contributions: qualifying earnings and pensionable earnings. As an employer you’re legally obliged to make a minimum contribution which can be increased at your own discretion.
Qualifying earnings are calculated on an earnings band that uses an employee’s total monetary earnings. This will include, not just their basic salary, but also their overtime, bonuses, commission, statutory maternity pay, statutory paternity pay and statutory adoption pay.
The qualifying earnings band for 2015/16 is £5,824 – £42,385, this will be reviewed on an on-going basis.
The minimum contribution rates that you, as an employer, must pay will be introduced gradually (this is known as ‘phasing’) and are as follows:
|Employee %||Employer %||Total|
|Oct 2012 -Sept 2017||1%||1%||2%|
|Oct 2017 – Sept 2018||3%||2%||5%|
|Oct 2018 onwards||5%||3%||8%|
Contributions must be based on the first pound of earnings.
We can help you determine which of the contribution methods will be best for you and more importantly, your employees. We can undertake a full cost analysis report on your behalf detailing exactly what you need to do and what it will cost your business.
Some forms of Auto Enrolment are not regulated by the FCA.
How can we help?
If you would like to discuss your auto enrolment requirements please complete the online enquiry form and we will give you a call to discuss your requirements.