Pensionable earnings is the definition of pay you use to work out pension contributions, for:
- your workers
- you, as their workplace contributing to their pension savings.
The minimum basis for working out auto enrolment pension contributions is qualifying earnings. But, you may choose to use one of the other definitions. You can use different definitions of pensionable earnings for all or different groups of workers.
Types of pensionable earnings
| Types of earnings | Definition | Minimum contribution rate |
|---|---|---|
| Basic earnings | Includes your basic pay and any statutory sick pay, statutory maternity pay, statutory paternity pay and statutory adoption pay. Workplaces can exclude things like bonuses, overtime and commission. | Workplace 4% Worker 5% |
| Qualifying earnings | All earnings between a lower and upper limit set by the government and reviewed each year. Includes salary, wages, commission, bonuses, overtime, statutory sick and parental leave pay (maternity, paternity and adoption pay). | Workplace 3% Worker 5% |
| Basic earnings (at least 85% of total earnings) | Basic earnings must make up at least 85% of total earnings, on average, for all workers in the pension. Workplaces can exclude things like bonuses, overtime and commission. | Workplace 3% Worker 5% |
| Total earnings | All earnings for a pay period including wages, commission, overtime, bonuses, performance-related pay and any other earnings. | Workplace 3% Worker 4% |
You can find out more about contributions on The Pensions Regulator’s website.