Work Pension and Bonus Payment

Al_Ross

My employer pays 3%  and I pay 5% into my work Stake Holder Personal Pension Plan each month.

If I receive a Bonus amount greater than my montly salary should 3 and 5% of the Bonus also get added to pension?

flaneurs_lobster

Depends entirely on what your contract of employment says, but it's unusual for additional pay over basic salary (overtime, bonuses etc) to be pensionable pay.

Your payslip should detail contributions to pension.

Penguin_

Also worth bearing in mind some pensions are subject to min & max earnings so if you already pay the maximum in a month, anything extra wouldn't be paid in.

Al_Ross

flaneurs_lobster said:

Depends entirely on what your contract of employment says, but it's unusual for additional pay over basic salary (overtime, bonuses etc) to be pensionable pay.

Your payslip should detail contributions to pension.

Nothing mentioned in contract.

The amounts that were added to my pension plan did match what was on my payslip but there were not 3 and 5%.

400ixl

Pretty much all companies use the base pay amount for pension contributions. So the 3 and 5% should be against your pay pre tax and additional items such as bonuses.

So if your base pay was £2k a month and your bonus was £500 a month it would only be the £2k which would be eligible for the pension contribution.

ali_bear

Al_Ross said:

If I receive a Bonus amount greater than my montly salary should 3 and 5% of the Bonus also get added to pension?

My employer pays a pensionable bonus. If I pay 3% monthly salary they pay 6% and it is the same for the bonus, up to a maximum of 10% from them. 

I think your scheme is paying the minimum they can get away with these days. 

Al_Ross

ali_bear said:

Al_Ross said:

If I receive a Bonus amount greater than my montly salary should 3 and 5% of the Bonus also get added to pension?

My employer pays a pensionable bonus. If I pay 3% monthly salary they pay 6% and it is the same for the bonus, up to a maximum of 10% from them. 

I think your scheme is paying the minimum they can get away with these days. 

So am I correct in thinking they are not obligated to pay 3% of my Bonus amount into my pension ?

QrizB

Al_Ross said:

ali_bear said:

Al_Ross said:

If I receive a Bonus amount greater than my montly salary should 3 and 5% of the Bonus also get added to pension?

My employer pays a pensionable bonus. If I pay 3% monthly salary they pay 6% and it is the same for the bonus, up to a maximum of 10% from them. 

I think your scheme is paying the minimum they can get away with these days. 

So am I correct in thinking they are not obligated to pay 3% of my Bonus amount into my pension ?

Nothing you've shared so far in this thread would suggest that they're obliged to treat your bonus as being pensionable.

It sounds very much as though your employer only treats "basic pay" as pensionable.

https://www.unbiased.co.uk/discover/tax-business/running-a-business/what-are-pensionable-earnings-and-how-do-i-calculate-them

Pat38493

Highly unlikely that would automatically treat the bonus as pensionable.  If you want to put some or all of the bonus into the pension via your pay, you could ask them if they will do that.  Some companies will allow that e.g. my company is very flexible with this and they will pretty much do whatever we want as long as they are asked before the end of the prior calendar month, so I can tell them to put my entire bonus into the pension if I want.

Other companies are less flexible and some may just say "computer says no".

400ixl

Correct, hey are not required to include your bonus in the pensionable amount. If you decide you want to include it in your pension contribution as an additional amount, they do not have to match their 3% payment to it.

So if you paid 5% of your salary including your bonus, they would only have to pay 3% of your salary excluding your bonus.

Thats not to say they can't agree to match salary + bonus should they choose to.

Do they match any payments over the 5% you pay? Say if you pay 6% do they pay 4%?

That could be a way to get more in from them. Pay 6% of your base and they pay 4% of it. 

tizerbelle

It depends whether your employer is using qualifying earnings as set by pension legislation or not. 

Qualifying earnings (the minimum legal contribution levels) are calculated on your earnings between £6240 and £50,270 per year. So the first £120/week £520/month earnings are not included in the pension calculations. Neither is anything earned over £967/week £4189/month.  BUT if your employer is only doing this bare minimum qualifying earnings with total 8% contributions (yours and employers combined) then all earnings not just base pay must be included so the bonus would have to be included in the contributions for that pay period.

If they don't use qualifying earnings so pension contributions are calculated on every penny of your normal pay, then they don't have to include the bonus in that.