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Auto Enrolment Staging Date and Cost Calculator
Starting in October 2012, new legislation requires every employer to enrol eligible UK workers into a pension scheme that meets certain standards. To find out more about the upcoming changes, download our Auto Enrolment Guide
The auto enrolment staging dates and cost calculator takes approximately 3 minutes to complete and will tell you:
- When you need to comply with the regulations;
- What the employer contributions costs might be;
- What the administration costs might be.
The calculator will provide you with a summary of the outputs and how best to proceed.
To get the most from this tool, you may want to have payroll data and current pension data to hand. (i)
To start the auto enrolment staging dates and calculator, enter your details below:
Instructions
Have to hand the number of employees in your largest PAYE scheme, and within this, for each employee category or grade:
Number of employees – the number of employees in that category or grade
Basic earnings – gross pensionable salary (the non-variable amount payable to an employee, before tax, from the first pound that is typically pensionable)
Non-basic earnings – gross earnings over and above basic earnings (typically the variable or non-pension amount paid in addition to basic earnings, before tax, such as allowances or overtime)
Scheme participation – the percentage of employees that are currently receiving employer pension contributions from you
Current average employer pension contribution – the average percentage of basic earnings paid as pension contributions
To start the calculator, enter your details below:
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1. Your staging date
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2. Your staging date
You will need to comply with the new regulations from -, known as your 'staging date'.
You have - days between now and then. (i)
Your staging date
New pension legislation is being introduced for all employers, over a period of 5 years, starting with the UK's largest companies in 2012.
Your 'staging date', or the date from which the legislation will apply to your company, depends on the number of employees in your largest PAYE scheme.
To find out how much employer contributions could cost you, click next.
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3. Employer contributions
From your 'staging date' you will be required to make contributions on behalf of your employees. The minimum legislative requirement is an increasing contribution, staggered between your staging date and 1st October 2018.
Please complete the table below in order to obtain an estimate of your employer contribution costs.
This will be more accurate if you group employees according to their current pension rules.
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4. Employer contributions: results
Your current employer pension contributions cost approximately - a year.
From your staging date, total employer contributions could cost approximately -, an increase of - versus current cost.
From 1 October 2017, total employer contributions could cost approximately - a year, an increase of - versus current cost.
From 1 October 2018, total employer contributions could cost approximately - a year, an increase of - versus current cost. (i)
Assumptions
No allowances have been made for changes in the workforce, inflation or adjustment of the trigger point for automatic enrolment.
No allowances have been made for those who may choose to opt-in or to opt-out of pension saving.
The current scheme operates a basic salary definition of pensionable earnings (under 'simplified certification' rules).
That total contributions by 1 October 2018 are 9% of gross basic earnings with a minimum of 4% from the employer. If basic earnings exceed 85% of total earnings the minimum contribution is reduced to 8% of gross basic earnings with a minimum 3% from the employer.
Basic earnings are averaged across employee groups to determine the minimum level of employer contribution.
The definition of pensionable earnings for certification may change over the period in order to minimise costs.
The number of employees shown are within the PAYE scheme that determines the staging date.
To find out how much implementing and managing the changes could cost you, click next.
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5. Administration & communication
You will need to perform numerous administration, communication and reporting duties, and may incur severe financial penalties for non-compliance.
These duties include assessing employees' age and earnings every payroll period, enrolling, processing opt-ins and opt-outs, dealing with refunds and re-enrolling.
You will also need to issue specific communications to employees at particular times during the process, and keep a number of records. Time spent preparing, amending payroll and introducing new processes will vary, however, based on the number of employees at -, we estimate that to administer this manually will take up to - hours and could cost you up to - every year. This rate is based on an assumption of up to 2.5 hours per employee per year for assessments, questions, communications and resolution of any issues. (i)
Assumptions
This rate is based on an assumption of up to 2.5 hours per employee per year for assessments, questions, communications and resolution of any issues.
The costs are calculated based upon fully-burdened costs on an hourly rate (i.e. including on-costs and overheads) for an HR Officer salary of £32,000.
To see a summary of the outputs from this calculator click next.
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6. Auto-enrolment calculator summary for -
- You have - days left before your staging date which is from -
- Your current employer pension contributions cost approximately - a year
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The total employer contribution cost with the new legislation could be approximately:
- - a year from your staging date, an increase of - versus your current annual cost
- - a year from 1 October 2017, an increase of - versus your current annual cost
- - a year from 1 October 2018, an increase of - versus your current annual cost
- Based on the number of employees at -, we estimate that to administer this manually will take up to - hours and could cost you up to - every year. This rate is based on an assumption of up to 2.5 hours per employee per year for assessments, questions, communications and resolution of any issues. (i)
Auto-enrolment calculator summary
No allowances have been made for changes in the workforce, inflation or adjustment of the trigger point for automatic enrolment.
No allowances have been made for those who may choose to opt-in or to opt-out of pension saving.
The current scheme operates a basic salary definition of pensionable earnings (under 'simplified certification' rules).
That total contributions by 1 October 2018 are 9% of gross basic earnings with a minimum of 4% from the employer. If basic earnings exceed 85% of total earnings the minimum contribution is reduced to 8% of gross basic earnings with a minimum 3% from the employer.
Basic earnings are averaged across employee groups to determine the minimum level of employer contribution.
The definition of pensionable earnings for certification may change over the period in order to minimise costs.
The number of employees shown are within the PAYE scheme that determines the staging date.
Administration and communication rates are based on an assumption of up to 2.5 hours per employee per year for assessments, questions, communications and resolution of any issues.
The costs are calculated based upon fully-burdened costs on an hourly rate (i.e. including on-costs and overheads) for an HR Officer salary of £32,000.
A copy of this summary has been emailed to you.
Best practice advises employers start preparing 18 months prior to their staging date. Do you have the support in place to manage this process?
If you would like to speak to one of our AE consultants, please click here.
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