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 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;
- 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 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 £118 a week (£512 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 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.
You can delay working out who to put into a scheme (known as postponement) on the date a staff member 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 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.