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Assessing staff whose hours and pay varies

If you employ staff whose hours and pay varies, the amount they earn will change each time you pay them and this can affect when they meet the earnings criteria to be put into a scheme and the amount you need to pay into a scheme (contributions) once they are in it.

Any staff aged between 22 up to state pension age who earn over the earnings criteria of £192 a week or £833 a month, must be put into a pension scheme which you must pay into.

What if my staff's earnings vary?

Once you have put them into a scheme they will remain in the scheme but the rise and fall in their earnings will affect the contributions you both make to the scheme.

What if my staff meet the earnings criteria on a ‘one-off’ basis?

You may have a member of staff who meets the earnings criteria on a one-off basis, as a result of a bonus or overtime. You can choose to delay putting them into a scheme (known as postponement).

If you are unsure about what to do, use our tool to help you with assessing staff whose hours and pay varies and find out what your next steps are.

What types of pay should be included in the assessment?

As well as their salary or wages, you should also include the following types of pay in your assessment, such as;

  • commission
  • bonus
  • overtime pay
  • statutory sick pay
  • statutory maternity pay
  • ordinary or additional statutory paternity pay
  • statutory adoption pay.

How much must be paid into the pension scheme?

By law, there is a total minimum amount that must be paid into the pension scheme. This is made up of a percentage of your staff's earnings and a percentage paid by you, the employer.

The amount you need to pay into the scheme will need to be calculated each time you pay your staff. As your staff's hours and pay fluctuates, the contributions will rise and fall depending on how much they earn.

Find out more about making contributions, the minimum amount and the percentages.

Is there an amount below which contributions don’t have to be paid?

If your staff have been put into a pension scheme and their earnings fall below £192 a week (£833 a month) during a pay period but remain above £116 a week (£503 a month) you will still need to pay contributions.

If they earn below this amount, you may not need to pay any contributions at all and they may remain in the scheme during this period. This will depend on the pension scheme rules so you should discuss this with your pension provider.

What can help when assessing staff?

Choosing the right payroll software

Payroll software set up for automatic enrolment can help. Most software will automatically assess your staff each time you pay them and can calculate the contributions for you, so it’s important to find the right software that meets your needs.

Find more information on checking your payroll process.

Using postponement

You can delay working out who to put into a scheme (known as postponement) on the date a member of staff first meets the age and earnings thresholds.

This is useful if you know their earnings have peaked on a one-off basis or you have a staff who will be working for you for less than three months.

You can use postponement for up to three months and during this time you won’t need to assess them until the end of the postponement period.

Find out more about using postponement.

Assessing staff whose hours and pay varies

My member of staff's earnings and hours vary – do they need to be put into a pension scheme?

Is your member of staff aged between 22 up to State Pension Age?

Each time you pay your staff you must work out how much they earn.

In your assessment you must include salary/wages and other types of pay such as

  • commission
  • bonus
  • overtime
  • statutory sick pay
  • statutory maternity pay
  • ordinary or additional statutory paternity pay
  • statutory adoption pay

Your member of staff doesn’t meet the age criteria so you don’t need to put them into a pension scheme

You only need to put them into a pension scheme if they ask to be put into one. However, you will still have duties, such as writing to tell them how automatic enrolment applies to them.

You will need to assess their age (and earnings) each time you pay them to work out if anything has changed.

Find out more about: Who to put into a scheme

Will they earn over £192 a week, (£384 a fortnight / £833 a month) every time you pay them?

Your member of staff meets the age and earnings threshold and you must put them into a pension scheme

You will both need to pay into the scheme.

The amount you contribute will rise and fall depending on how much they earn.

Choosing the right payroll software can help you calculate these contributions.

Find out more about: Who to put into a scheme

Your member of staff sometimes meets the earnings threshold and when they do you must put them into a pension scheme

You will both need to pay into the scheme. The amount you contribute will rise and fall depending on how much they earn. If they earn below a certain amount you may not need to pay any contributions at all and they will remain in the scheme.

If their pay only reaches the earnings threshold on a one off-basis, then you could use postponement. This allows you to delay putting them into a scheme for up to three months.

You will not need to assess them during this time but you will need to assess them again at the end of the postponement period

Find out more about: Who to put into a scheme

Your member of staff doesn’t meet the earnings threshold so you don’t need to put them into a pension scheme

You only need to put them into a pension scheme if they ask to be put into one. However, you will still have duties, such as writing to tell them how automatic enrolment applies to them.

You will need to assess their earnings (and age) each time you pay them to work out if anything has changed.

Find out more about: Who to put into a scheme

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