The DWP recently confirmed the thresholds that will apply to auto enrolment pensions from April 2017.
The main qualifying threshold at which employees should be automatically enrolled will be maintained at £10,000 per annum. The lower limit of the qualifying earning band (the amount at which you must start contributing to an employee’s pension) will be £5,876. The upper limit will be £45,000.
If you use qualifying earnings to work out employer contributions the first £5,876 of an employee’s annual earnings isn’t included in the calculation. You’ll contribute a percentage of a worker’s gross annual earnings that fall between £5,876 and £45,000. So if an employee earns £20,000, the earnings on which you pay a contribution will be £14,124.
Many small and micro-businesses will have auto enrolment staging dates within the coming financial year. If this applies to you, you should already have been notified of your date.
If your staging date is in 2017-18 your preparations should already be well under way. If you don’t feel you are properly prepared then get in touch and Langricks will be happy to help.
To be on the safe side, you can check your staging date by entering your PAYE number into the tool on the Pensions Regulator website: http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx
Micro businesses that have no employees other than directors who work without a contract of employment may be exempt from auto enrolment. However, you will need to fill out a declaration so you still can’t ignore your staging date. Read more about exemptions.