Articles on: Automatic Enrolment

How much will I have to contribute for Automatic Enrolment?

There is a minimum total amount that has to be contributed by you, your employer, and the government (in the form of tax relief).

These minimums are generally: 5% from you (which includes tax relief) and 3% from your employer.

The minimum contribution applies to anything you earn over £6,240 up to a limit of £50,270 (in the tax year 2024/25). This slice of your earnings is known as ‘qualifying earnings’.

So, if you were earning £18,000 a year, your minimum contribution would be a percentage of £11,760 (the difference between £6,240 and £18,000).

Some employers use ‘pensionable earnings’ to work out your pension contribution rather than qualifying earnings.

If this applies, your pension contributions might not be based on qualifying earnings and will instead be calculated according to the rules of the scheme.

If you’re not sure about which earnings your pension contributions are based on, talk to your employer.

Your employer will let you know how much of your earnings you’ll need to contribute.

They might tell you this as a sum of money or as a percentage.

Updated on: 16/04/2024

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