Along with the Minimum and Living Wages, auto enrolment pension contributions for employers and employees also increase as of 6 April 2019. The increases mean that employees will be contributing a minimum of 5% of their qualifying earnings each month, whilst employers will be contributing 3%. This gives a total pension contribution of 8%.
If you are already paying above the current minimum rate of 2% for employers you must ensure the amount you are paying will reach the mandatory 3% of qualifying earnings when the change comes into effect in April.
Employers Need to Check Some Key Calculations Before April 6th
As an employer you might need to make a few new calculations before the start of the next payroll year:
- Check the current hourly pay rate for each of your employees to ensure they are being paid the correct rate for their age and that it will meet the new hourly pay rate for their age.
- Check whether the current pension contribution you are making (if more than the mandatory 2%) is sufficient to cover the new mandatory rate of 3% of qualifying earnings.
In addition, with the end of the 2018/19 payroll year only a few weeks away, it is worth checking with your employees that the details shown on their payslip are correct ? mistakes are easily made in this area.? Any changes to information can then be submitted to HMRC as part of the final submission for the year and will ensure their P60 information is correct.
Contact us if you need any help or advice with your payroll in the new payroll year.