Under the current pension regulations, every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it. This is called 'Automatic Enrolment'. UK Property Accountants have a dedicated pension compliance team to help you comply with the pension regulations.
How much pension contribution is required?
The minimum contribution by the employer in the pension scheme is 3% of the staff earnings. The total minimum contribution is 8% (which means employees have to contribute 5% on top of 3% employer's contribution).
However, you may choose to pay more if you choose to do so.
The staff earnings, in this case, means a specified range of earnings between £6,240 to £50,270 for the tax year 2021/22. These figures are reviewed each year by the government.
Staff earnings include the following types of staff pay:
You can use the Employer Contributions Calculator by the pension regulator to find out the exact contribution figure.
How does the pension enrolment mechanism work?
The first thing to do before making the pension contribution is to choose the pension scheme and register with the pension scheme. Following are the most common pension providers for small companies:
Once registered with one of the pension schemes, you will need to deduct the pension from the employee’s pay and send both employee and employer’s contributions to the pension scheme. You will also need to file a pension scheme return each month to let the pension scheme know about the pension contributions.
UK Property Accountants can help you with all this process.