Payroll News

Automatic Enrolment Changes

Employee Classification

The Pensions Regulator have taken steps to simplify the assessment classifications of your workers. Prior to these changes, an employee could either be an entitled worker, a non-eligible jobholder or an eligible jobholder based on their age and gross earnings. These classifications have now been changed to Type 1 and Type 2 employees.

  • Type 1 (originally eligible jobholders): Employees that are aged between 22 and State Pension age and earn in excess of £833 per month (£192/week)
  • Type 2 (originally entitled or non-eligible jobholders): Employees that are aged 16-21 or between State Pension age and 74 or who earn less than £833 per month (£192/week)

Type 1 employees need to be automatically enrolled in to your pension scheme whereas Type 2 employees do not.

Date Change

To coincide with the start of the tax year, the dates at which increases to the minimum contributions are due to take effect have (provisionally) been amended – subject to a Parliamentary review.

  • 6th April, 2018 to 5th April 2019 (originally October 2017 to September 2018): Employer minimum contribution 2% and total minimum contribution 5%.
  • 6th April, 2019 onwards (originally from October 2018 onwards): Employer minimum contribution 3% and total minimum contribution 8%.

Please get in touch if you require any assistance when setting up or administering your automatic enrolment pension scheme.

AH @PaylineBureau

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