Pensions Auto-enrolment: Don’t forget to claim
Pensions advice to employers
The minimum auto-enrolment rate of pensions contributions has increased to 5% of employees qualifying pay since April 2018.
The minimum employer contribution of this is 2%.
The increase may mean that for the first time your employees have to pay contributions out of their pay.
It’s up to you to collect these and pass them on to the pension company.
The contributions you collect are net of basic rate tax relief.
For example, if the pension deduction is £50 per month, the actual deduction from pay after tax is £40, i.e. £50 less 20% tax relief. If your employees pay tax at higher rates they are entitled to claim further tax relief. If workplace pension deductions are new to your workers, it would help them to know if they can claim tax relief and how to do it.
NB: As an employer you aren’t required to help employees with their personal tax, but as a measure of goodwill you might like to, especially as it involves a deduction from their pay.