How Much Do You Need To Pay?
The UK government in 2008 rolled out a program that required all employers regardless of their size to enroll their eligible employees in a pension scheme in order to supplement state pension. As the program is being implemented, there have been many questions, the most important of which is related to auto enrolment contributions. Specifically, how much do you need to pay?
We looked at the website http://www.thepensionsregulator.gov.uk/ and found some information you will find very useful. The amount you’re required to pay in auto enrolment contributions is determined by the rules set out by the government, however, there are minimum contributions that need to be paid. For a every 2% contribution by the employee, the employer must pay at least 1%. The amount of money can either be a fixed amount or be based on a certain percentage of earnings.
The auto enrolment program is on a schedule basis, meaning that employers are given a certain date by which they comply with the requirements of the program.
Who qualifies for auto-enrolment? All employees who are over 22 years old and are regular employees, meaning they’re not temporary workers or are contract employees, are automatically enrolled in their company’s pension scheme. If you qualify but you are still not employed, there’s a great chance your company’s date for implementation hasn’t come yet. If you want to know what’s going on, ask your employer or better yet, contact the website we mentioned above.
If you’re an employer, you can enlist the help of an accountant to make you compliant with auto-enrolment. The program is actually being implemented with the help pension scheme providers and trustees – you can ask them if you’re not sure how much you need to pay and when you need to pay.
But even if you’re not sure about the details, there’s no doubt that you need to pay up, unless if you want to be fined by the regulator. Aside from the payments, you are also required to keep certain records. Again, if you are unsure, make sure to ask official government sources, like the website we mentioned earlier.
If you want to know how much you’re going to pay in employer contribution, there is a calculator tool that you can use.
So now that you know everything there is to know about contributions, you might be wondering if you should hire an accountant to help you comply with auto-enrolment. Well, you do need your accounting staff to make adjustments so that they’re calculating the contributions and are setting up automatic payments.
If you’re seeking accountants in order to seek financial advice, don’t. Accountants are not required to give information such as investment returns on pension contributions. However, you can ask them for help on the continuous implementation of your company’s pension scheme.
If you need more information on automatic pension enrolment, you should check out the two links that we mentioned in the preceding paragraphs.