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What are insufficient earnings?

The term insufficient earnings is used when a member’s earnings for a particular period fall below the minimum amount eligible to receive a contribution.

Depending on the earnings basis you use to calculate minimum contributions, there may be a pay period where the member’s pay dips below the minimum threshold for a contribution.

For example, qualifying earnings currently has a weekly minimum threshold of £120 (for the 2020/21 tax year). That means that if the weekly paid member’s pay dips below £120 in a week then you won’t need to make a contribution for them. Please see How do I calculate contributions if I’m using qualifying earnings?

If a member doesn’t earn enough in a pay period to make any contribution, you’ll need to tell us using a contribution schedule.

All contributions should be paid on a contribution schedule and we only recommend that an exception schedule is used if there’s no contribution schedule available for the period you need to pay for. A member may still show on a contribution schedule if they’re eligible to be on there even if you’ve paid for them on an exception schedule.

The member may not have worked enough hours in a pay period or they may have been on unpaid leave. If you don’t inform us, you may receive a late payment notice.

There may be different reasons for the member having insufficient earnings, for example if they’re on family leave or leaving employment. If the member hasn’t earned enough in a particular period because of these reasons you should use the right option or reason in the contribution schedule to let us know. Please see Making partial or zero contributions for more information on the different options and reasons.

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