New auto-enrolment contribution rates
New rates. As you’re probably aware, the rate of pension contributions for employees who you have auto-enrolled in your firm’s pension scheme more than doubles with effect from 6 April 2018. A further increase will will apply from April 2019. The current and future rates of contribution are shown in the table below.
Date | Employer minimum contribution | Total minimum contribution |
Up to 5 April 2018 | 1% of pay | 2% of pay |
From 6 April 2018 | 2% of pay | 5% of pay |
From 6 April 2019 | 3% of pay | 8% of pay |
Employee contributions. Contrary to popular belief there’s no requirement for employees to pay contributions, but if they don’t you, as their employer, must take up the slack so that the minimum contribution level is met. However, if you aren’t willing to do so employees must formally opt out of auto-enrolment, which requires you to issue certain documents to them (see The next step ).
For more information on employee opt-out, visit http://tipsandadvice-tax.co.uk/download (TX 18.12.08).