Different ways to work out minimum contributions
You don’t have to use qualifying earnings to work out contributions for jobholders. For example, you can use your existing definition of pensionable earnings if you already have a scheme in place or you might find it easier to use total pay.
This is often referred to as certification because you have to complete a document called a certificate if you’re using an earnings basis other than qualifying earnings. Minimum contributions are still phased in, but the minimum contribution rates may be different depending on which basis you choose.
Deciding which earnings basis is right for you and your workers will depend on your current pensions and reward strategies and the different cost of each option. The Pensions Regulator can help you understand which one is best for your organisation.
Using NEST to manage contributions
NEST allows you to use a definition of earnings that suits your organisation. It lets you work out contributions based on either qualifying earnings or one of the alternative earnings bases.
Our preset contribution levels make it easier to calculate minimum contributions. Or you can work out your own basis for pensionable earnings and use that if you want to. You can also choose to set contributions at a higher rate than the minimum.
We have a range of guides and case studies on contribution rates to help you get to grips with the different options.
Download our Guide to contribution levels and earnings bases (PDF).