auto-enrolment threshold 24 October 2019 at 11:48AM edited 30 November -1 at 12:00AM in Auto-enrolment 4 replies 2.5K views

stinky_daddy

Hi

probably been asked (and answered) several times already, although could not find anything when I searched on certain keywords that might be applicable

I have recently started a new job (after being unemployed for several years due to an accident), and have just received my first payslip, however, I am being told that £6136 is deducted from the gross salary before any pension contribution is calculated - is this correct?

If yes, then what is the £6136 for / based on (surely it is not what the government believes you can survive on)?

While 5% is calculated on the remaining figure, it is not 5% of the gross salary which it should be, or am I looking at this completely wrong?

TIA

s_d

Paul_Herring

Note that these are what are required as a minimum by law of employers. Some may choose to (to your benefit) ignore the limits (e.g. ignore the £6,136 limit and treat it as if it was £0, and/or ignore the £50,000 limit and give it on all earnings)

https://www.autoenrolment.co.uk/knowledge-bank/in-depth-articles/employee-classifications-qualifying-earnings

https://www.thepensionsregulator.gov.uk/en/business-advisers/automatic-enrolment-guide-for-business-advisers/9-knowing-your-clients-ongoing-duties/automatic-enrolment-earnings-threshold

however, I am being told that £6136 is deducted from the gross salary before any pension contribution is calculated - is this correct?

That is correct.

If yes, then what is the £6136 for / based on

No idea. It works out to about 14 hours per week at minimum wage (at the moment) so they may have chosen 16 hours at the time? That's pure speculation however.

While 5% is calculated on the remaining figure, it is not 5% of the gross salary which it should be, or am I looking at this completely wrong?

It's 5% on the remainder after subtracting that £6,136.

But as I said above, some more enlightened employers may ignore that last bit and work it out on the whole amount, but they're not required to.

cloud_dog

Paul_Herring wrote: »

No idea. It works out to about 14 hours per week at minimum wage (at the moment) so they may have chosen 16 hours at the time? That's pure speculation however.

It is the Lower Earnings Limit and relates to what is considered 'qualifying earning'. See here.

Paul_Herring

cloud_dog wrote: »

It is the Lower Earnings Limit and relates to what is considered 'qualifying earning'. See here.

You linked to the same place as second link in my post. Perhaps you meant this one:

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

And using that sorta makes sense. At least for choosing a non-zero number for the sake of choosing one...

LHW99

Can you choose to pay more? If so, why not - at least make sure you put in enough to get the maximum employer contribution.