The amount an employer and their staff members pay into employee pension schemes may vary depending on which pension scheme you choose. However, by law, an employer and their staff must pay a minimum amount into their scheme.

The employer must pay at least 3% of their staff member’s earnings, whereas the staff member must pay a minimum of 5% of their own earnings, 4% being their own contribution and the remaining 1% being contributed by HMRC.

When a staff member pays into their pension scheme, you need to know what staff earnings to use in calculating their pension and the calculation used to acquire the pension sum.

From their monthly earnings you deduct £520, the sum leftover is then used to calculate the pension the staff member and employer must pay.

Employers should provide information of any changes to a staff member’s earnings or their contribution rate; or any requests to join or leave the pension scheme, to the pension scheme provider.

For more information about tax and areas where your company can become tax efficient, contact Cheylesmore Accountants today to enable us to provide you with an end-to-end service including advice on how optimise your company’s financial affairs. With various packages containing services ranging from just bookkeeping through to Virtual Finance Office and Tax Investigations, you can rely on us to deliver a quality experience and provide comfort that your tax affairs are in order.