The UK Rules
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Contributions

Workplace Pension Contribution Calculator

How much do you, your employer, and the government pay towards your pension? Find out the amount you and your employer contribute to your workplace pension.

WORKPLACE PENSION PAYMENTS: Two factors determine the amount you and your employer will pay:

  1. Which one of the workplace pension schemes you got enrolled in.
  2. Whether you 'opted in' voluntarily or got automatically enrolled.

Payday Example: A Defined Contribution Pension Scheme:

Note: The 'Money Advice Service' has a workplace pension contribution calculator. It is an online facility for working out your contributions. The government also have an employer contribution calculator. This tool helps you work out how much your employer pays in.

Government Tax Relief

As a rule, the government adds money to your workplace pension. It will be in the form of tax relief on private pension contributions. But, it only applies if you pay Income Tax and make payments into a personal pension or a work-based pension.

What happens if you are not liable for Income Tax? In some cases you may still get extra payments added by the government. But, your pension scheme needs to use 'relief at source management' to get the payments added to your pot.

Pension Contributions after Automatic Enrollment

What happens after auto enrolment? You and your employer pay a minimum percentage of your 'qualifying earnings' into your occupational pension plan.

Your employer calculates your qualifying earnings based on your total earnings between £5,876 and £45,000 a year (before tax). Where applicable, total earnings will include:

Table of Workplace Pension Contributions

Schedule Minimum Payment by Your Employer Amount You Pay Total Pension Contribution (minimum)
From April 2019 3% 5% 8%
From April 6th 2018 2% 3% 5%
Up to April 6th 2018 1% 1% 2%

In some cases, the amounts may be higher for you or your employer. The rules of your pension scheme will determine the higher amounts (often in defined benefit pension schemes).

You and your employer can choose to pay in more than the legal minimum in some schemes. Providing your employer pays the legal minimum, you can pay less than the least amount required by law.

Pension Contributions after Voluntary Enrollment

Your employer does not need to contribute anything if you earn less than these amounts. But, they must pay workplace pension minimum contributions if you earn over:

How it Affects Take-home Pay

In most cases joining a workplace pension scheme reduces your take-home income. But, it also means you may:

Salary Sacrifice Payments

Some employers use salary sacrifice payments - also called the 'SMART' scheme. Payments using salary sacrifice let you give up part of your salary which your employer pays straight into your pension. Often, this allows you and your employer to pay less tax and less National Insurance contributions.

ALSO IN THIS SECTION

About Workplace Pensions: An overview of workplace, work-based, occupational, or company pensions.
Joining a Workplace Pension Scheme: All employers must provide a works pension scheme by 2018.
Workplace Pension Protection: The type of scheme you have determines how a pension gets protected.
Workplace Pension Management: The role of a pension provider and how they manage pension pots.
Changing Jobs: Find out what happens to your company pension if you change jobs or take leave.
Opting Out: Check your rights and the correct process for 'opting out' leaving a workplace pension.
Workplace Pension Helpline: Free information and advice taken from The Pensions Advisory Service.

Workplace Pension Contribution Calculator and Tax Relief in the United Kingdom