What Are The Minimum Employer And Employee Contribution Requirements For A Workplace Pension In 2024/25?

As a business owner, I know that pensions are incredibly valuable to my staff. Some of my employees are not sure how much they have to contribute or how much I have to contribute as their employer. Could you clarify the minimum contributions for both parties?

Question asked by Anna Lane

By law, you as the employer are required to pay a certain contribution to your employee’s pension pot. They also have to contribute. The government has set this as 8% of your employee’s qualifying earnings. The qualifying earnings for the tax year 2024/25 is between £6,240 and £50,270 a year.

As an employer, you have to pay at least 3% of the 8%, but you can pay more if you want to further boost their pension fund.

After your 3% contribution, employees pay 5% of their earnings as standard. This can change if you decide to pay a higher percentage and they want to reduce their payments without going below minimum requirements. For example, if you paid 6% into the workplace pension, your employee would only need to pay 2% to reach the minimum contribution amount.

1% of the employee’s 5% contribution is tax relief provided by the government.

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