Change in contribution rates
Are you ready for the upcoming increases to contribution rates.
You will need to change the amount of contributions you pay your workers.
What do you need to do now?
You'll need to ensure you collect and pay the correct contribution amounts in accordance with the new minimum rates. You also need to inform your workers of this change.
TPR guidance states that if your pay day is in the pay period that crosses 6 April 2019 but falls before 6 April 2019 then the increase can be deferred until the next pay date.
If the pay day falls on or after 6 April 2019 then the increase applies from the pay period that crosses 6 April 2019.
If you are unsure what rates to use you can find more information here
For example if your contribution rates were 2% employers contribution and 3% employees contribution, after the 6th of April they’ll increase to the new rates of 3% employers contribution and 5% employees contribution.
The new rates will always apply from the start of the earnings period for your groups.
It is important to remember you have a legal duty to pay your contributions on time. If your provider doesn’t
receive submissions and payment on time they may report you to The Pensions Regulator.
|Previous employer contribution rate||Previous worker contribution rate||New employer contribution rate||New worker contribution rate|
|2.0 per cent||3.0 per cent||3.0 per cent||5.0 per cent|
Where to go for more information
If you are unsure about the rate increases in automatic enrolment in the first instance contact your approved pension provider. Digital and Management Services are also here to help, don’t forget we can manage your payroll and auto-enrolment along with providing your staff with an online payroll portal and electronic payslips.