Increase in Automatic Enrolment contribution rates.

Automatic Enrolment has placed an increase on employer costs for many businesses across the UK. Automatic Enrolment can include some or maybe all of the following costs for a business.

• Payroll costs (additional processing/software subscription costs)
• Assessment costs if not included in software
• Pension contributions
• Communication costs
• Additional administrative support
• Financial advice
• Pension provider costs

With Automatic Enrolment being law, it is required that employers legally offer a qualifying scheme and contribute into it for any worker that is eligible to be enrolled, or any worker that chooses to opt in (please not for any entitled workers that choose to join, you as an employer do not need to contribute.)  At present, contributions are set to a minimum of 2%, with 1% coming from the employee, and the other 1% from the employer.

However, from 5^th April 2018, these contributions are set to rise to a new minimum, and then will do so again from 6^th April 2019. This will mean an extra cost to employers.  Below we have listed the minimum contribution rates for both the employer and employee over the next couple of years.

Up to April 5th 2018

• 2% of qualifying earnings must be paid as minimum contributions. This is made up of 1% each from both the employee and employer.

April 6th 2018 - April 5th 2019

• The minimum contribution will rise to 5% minimum, with 2% from the employer and 3% coming from the employee.

April 6th 2019 onward

• The minimum contribution amount will be set at 8%, with the employer contributing 3% and 5% employee contribution.

For each of the three increases, the employer will contribute 1%, 2% and 3%, with the employee making up the remainder. These increases are nothing new, from the very start when Automatic Enrolment was introduced, these figures have been the required minimum.

Are you prepared for Automatic Enrolment?

Every small business is set to have staged for Automatic Enrolment by the end of 2018. Along with other administration costs AE can place, employers have to prepared for the effects it will have on their business and think how they intend to meet these requirements, that’s why we are here to help.

With Chrysalis Payroll and Accounting Solutions, these worries would be none existent. Our Automatic Enrolment solutions will save your business both time and money. Our comprehensive knowledge of this legislative change which comes from being trained by the worlds largest software provider of payroll and accounts, and also from the The Pensions Regulator themselves, means we can offer these solutions to our customers compleley free of charge. Meaning no aministration costs, or costly support charges, we get rid of all other costs of AE and leave you just with the contribtuions ammounts.  With these contributions setting to rise very soon, now is a great time to get on board.  We will do everything for you, from the set up, right through to the ongoing processing and communications with both employees and pension proivders.

If you want more information on how we could help you, you can contact us on; 0191 673 0062 or email info@chrysalispayroll.co.uk