Automatic enrolment for employers
The law on workplace pensions has changed. Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it. This is called ‘automatic enrolment’.
Whether you’re a hairdresser, an architect or employ a personal care assistant, if you employ at least one person you are an employer and you have certain legal duties.
How much you must pay
The amount you must contribute to the pension scheme is determined by the scheme’s rules. However, if you’re using the scheme for automatic enrolment there are minimum contributions you must pay.
The minimum contributions that you must pay into your staff’s pension scheme are shown in the table below – they’re currently a total contribution of 2% with at least 1% employer contribution.
| Date | Employer minimum contribution | Total minimum contribution |
|---|---|---|
| Employer’s staging date to 05/04/18 | 1% | 2% (including 1% staff contribution) |
| 06/04/18 — 05/04/19 | 2% | 5% (including 3% staff contribution) |
| 06/04/19 onwards | 3% | 8% (including 5% staff contribution) |
Minimum contributions are being introduced gradually over time. You will usually pay pension scheme contributions either as a fixed amount or based on a percentage of earnings.
Your minimum employer contribution
Pension contributions are usually expressed as a fixed sum or a percentage of earnings. If they’re expressed as a percentage you will need to confirm salaries with your pension provider / trustees regularly as necessary from time to time.
You also need to decide what elements of staff pay are used to calculate pension contributions, subject to any overriding legislative requirements, such as in relation to automatic enrolment. You may decide that only basic pay is pensionable but not bonus or overtime payments. Let your pension scheme know what you decide.
When you must pay your contributions
You need to pay your contributions to your staff pension scheme on time. This includes calculating and deducting contributions from your staff’s salaries. You must agree the due dates for paying contributions to the scheme with your trustee or provider.
However the law requires that when you deduct contributions from your staff’s pay you must pay these to your staff pension scheme no later than the 22nd day (19th if you pay by cheque) of the next month.
Managing your payroll effectively requires excellent administration, technical know-how, good software and effective management. This makes it more expensive that you think to manage it in-house.
Outsourcing your payroll to an accountancy firm is often more cost effective, and allows you more time to concentrate on running your business.
Our specialist payroll team has knowledge of current payroll legislation, and can advise you how it affects your business. Visionary Accountants offers payroll services to suit your business needs and we allocate you a designated payroll expert who you can work with.
Our payroll team has considerable payroll experience as we currently manage the payroll for local small and medium-sized businesses across a range of different industries.
The new auto-enrolment legislation will place a greater administrative and legislative burden on smaller companies, so maybe it is time to consider outsourcing your payroll?
Auto Enrolment & Workplace Pensions
Our Employer’s Guide provides key facts and action points about how to set up workplace pensions and manage your auto-enrolment.
Our Auto Enrolment Management Solution is affordable because we offer you in house payroll, workplace pension and auto-enrolment expertise.
At Livingstones Accountants, we work with the sole aim of keeping you free to carry on with your business and thus, we offer the following services:
- Determine your company staging date
- Set up a Qualifying Workplace Pension Scheme
- Initial analysis of your workforce
- Preparation of cost budgets
- assess your workers on the staging date for their workplace pension
- Recommend information to be sent to your workers regarding workplace pensions
- Send information to workers on your behalf
- Assess worker eligibility for your workplace pension scheme each payday
- Calculate employee/employer pension contributions
- Prepare payment schedules for the workplace pension scheme provider
Our Auto Enrolment Payroll Services
By using our accountancy and wealth management services you will benefit from our enhanced payroll solution. We can assess your workforce and manage the ongoing payment of workplace pension contributions.
After your company is through its staging date you will need to provide regular updates and information to The Pension Regulator, re-assess your workforce every pay day, hold records and provide ongoing communication with new employees regarding your workplace pension. Assessing worker eligibility is complicated and time-consuming and requires sophisticated payroll services.
Assessing worker eligibility is complicated and time-consuming and requires sophisticated payroll services.
Give Livingstones Accountants a call today and see how much time we can save you.
