Work Pension Contributions

Al_Ross

I  pay 5% and my employer pays 3% into my work pension. I have tried working out how the amounts are calculated using the Net Pay Arrangement and also the Relief At Source method  but both ways do not give the correct amount that is going into my pension fund, it appears the amount going into my pension fund is less than it should be.

I am in Scotland if that makes a difference.

JoeCrystal

The auto-enrollment pension limit is based on the "qualifying earnings" band, which for 2025/26 is between £6,240 and £50,270 per year. Have you try remove £520 from your monthly income and calculate 5 per cent on the remaining income?

Dazed_and_C0nfused

Al_Ross said:

I  pay 5% and my employer pays 3% into my work pension. I have tried working out how the amounts are calculated using the Net Pay Arrangement and also the Relief At Source method  but both ways do not give the correct amount that is going into my pension fund, it appears the amount going into my pension fund is less than it should be.

I am in Scotland if that makes a difference.

Is your employer applying the auto enrolment earnings threshold?

If so you can increase your % to counter that but your employer doesn't have to increase theirs.  If they are applying the earnings threshold I would suspect they are less likely to match any increase you make to your %.

https://www.thepensionsregulator.gov.uk/en/employers/new-employers/im-an-employer-who-has-to-provide-a-pension/declare-your-compliance/ongoing-duties-for-employers/earnings-thresholds

Al_Ross

Would an annual salary of £36500 trigger earnings threshold ?

NormalNorman

Probably not related but I had an issue where the employer contributions were lower than expected. 

Quite simply the employer had reduced how much they paid in by a couple of percent following being taken over and TUPE being ignored. I was asked to provide evidence to HR/Payroll... I just sent the emails from their bosses explaining the TUPE process, lol!

Sorted!

Grumpy_chap

Al_Ross said:

Would an annual salary of £36500 trigger earnings threshold ?

Qualifying earnings for auto enrollment start at £6,240

Marcon

Al_Ross said:

Would an annual salary of £36500 trigger earnings threshold ?

The relevant information has already been given here:

JoeCrystal said:

The auto-enrollment pension limit is based on the "qualifying earnings" band, which for 2025/26 is between £6,240 and £50,270 per year. Have you try remove £520 from your monthly income and calculate 5 per cent on the remaining income?

molerat

Al_Ross said:

Would an annual salary of £36500 trigger earnings threshold ?

And pension contributions can also be set on basic pay with other additions not being pensionable.   Without actual figures no one can guess at what is happening.  Is the pension relief at source, where your contribution will likely only be 4%, or net pay ?

rjmachin

Based on £36,500, or £3,041 per month, £2,521 would be used for pension contributions.

Are these roughly in the area you are seeing on your payslip?:
Employee (5%): £126.08
Employer (3%): £75.65

Al_Ross

rjmachin said:

Based on £36,500, or £3,041 per month, £2,521 would be used for pension contributions.

Are these roughly in the area you are seeing on your payslip?:
Employee (5%): £126.08
Employer (3%): £75.65

Yes that is correct. I had forgotten that no pension contributions are taken on the first £6240 of your sallary.

Seems a bit daft, surely the employees should get to decide if they wish to contribute straight away.

Marcon

Al_Ross said:

rjmachin said:

Based on £36,500, or £3,041 per month, £2,521 would be used for pension contributions.

Are these roughly in the area you are seeing on your payslip?:
Employee (5%): £126.08
Employer (3%): £75.65

Yes that is correct. I had forgotten that no pension contributions are taken on the first £6240 of your sallary.

Seems a bit daft, surely the employees should get to decide if they wish to contribute straight away.

You can decide to contribute straight way/ contribute more (ie on the basis of your whole salary) simply by asking to do so.