06 Jan 2014
January 6, 2014

Top Ten Auto Enrolment Terms

0 Comment

If you employ staff then you need to know about Auto Enrolment, but if you read the articles and advice then there are a lot of terms which you may not understand.  Hopefully my top ten auto enrolment terms can help you make more sense out of what you need to know :

  1. Jobholder – someone who is aged between 16 and 75,  normally works in the UK and earns above the lower earnings level for qualifying earnings.
  2. Eligible Jobholder – a Jobholder who is aged at least 22 but has not yet reached state pension age and earns above the earnings trigger for automatic enrolment.  Basically they are a jobholder who is eligible for auto enrolment.
  3. Non-Eligible Jobholder – a Jobholder who is not eligible for auto enrolment but who can choose to opt in.  They are aged at least 16 and under 75 and earn above the lower earnings level of qualifying earnings but below the earnings trigger for automatic enrolment  or they could be aged at least 16 and under 22 or between state pension age and 75 and earn above the earnings trigger for automatic enrolment.
  4. Entitled Worker – A worker who is aged between 16 and 75, normally works in the UK and earns below the lower earnings level for qualifying earnings.
  5. Qualifying Earnings -There is a long list of possible qualifying pay elements, which includes salary, wages, commission, bonuses, overtime, statutory sick pay, statutory maternity, paternity and adoption pay.  These earnings are used to determine if a person is an eligible jobholder and may be used to decide the level of contributions appropriate.
  6. Pay Reference Period – this is the period of time for which an employer pays the worker their regular wage or salary, and is not necessarily the same a the tax period.
  7. Postponement – there are two types of postponement.  With worker postponement the employer can choose to delay the staging date by up to 3 months if they need extra time to get ready for Auto Enrolment. With eligible postponement an employer can choose to postpone an eligible jobholder to avoid pro rata contributions or to ‘smooth’ a spike in earnings of a worker that could potentially change their status on a temporary basis to an eligible jobholder.
  8. Qualifying Scheme – a pension scheme which meets the minimum standards in legislation,
  9. Staging Date – the date assigned to an employer which is based on the number of people being paid on the PAYE scheme.  It is the date from which the employer assumes responsibility for Auto Enrolment.  To find out your staging date then let us know your PAYE reference number.
  10. Phasing – to help employers and employees gradually get used to the pension contributions there is a phasing-in of contribution levels so they gradually increase to the minimum levels required by law, starting at a minimum total contribution of 2% from October 2012.

If you are not yet sure if Auto Enrolment applies to you then take a look at my previous post ‘What do I need to do for Auto Enrolment’.  Silicon Bullet have partnerships with financial advisers and pension experts to suit a wide variety of company sizes, so if you are worried about how auto enrolment will effect you or just need a bit of friendly advice then please get in touch.

Whatever the size or type of business you run there’s Sage Payroll software for you,. Over 500,000 employers in the UK choose Sage Payroll software to pay 7.6 million employees,  so why not join them with our support.

Leave a Reply

Your email address will not be published. Required fields are marked *

  • The reCAPTCHA verification period has expired. Please reload the page.

This site uses Akismet to reduce spam. Learn how your comment data is processed.