Auto-Enrolment Pension Contributions Increase From 6 April 2019

Auto-enrolment pension contributions are to rise from 6 April 2019 for both employees and employers.

What are the increases?

The minimum amount that should be paid into employee pensions rises from 6 April 2019 to 8% of an employee’s qualifying earnings. At least 3% must come from employers, while employees make up the difference. The table below shows how the levels of contributions would look if the employer pays the minimum percentages required of them. These percentages can vary if an employer calculates contributions using different elements of pay.


Date Employer minimum contribution Employee



Tax relief on employee contribution


Total minimum contribution

New rate: From 6 April 2019








Current rate:

6 April 2018 to

5 April 2019






By law (unless the employee has opted out or rolled down) a total minimum amount of contributions should be paid into the scheme; therefore if you don’t do this it could result in a fine. Where the employer decides to cover the total minimum contribution, staff are not required to make contributions.

The amount the employer and staff pay into a pension scheme will vary depending on the type of scheme chosen and the rules of the scheme. Therefore the staff contribution may also vary depending on the type of tax relief applied by the scheme. Read more about workplace pensions and tax relief on pension contributions here.

Most employers use pension schemes that from April 2019 will require a total minimum of 8% contribution to be paid.

Who does this apply to?

The increases to pension contributions relate to all auto-enrolment pensions and all existing pension schemes apart from defined benefit schemes. No further action should be taken if you don’t have any staff in a pension scheme for automatic enrolment, or if you are already paying above the increased minimum amount. You can find out more about auto-enrolment pension schemes on The Pensions Regulator website.

You may have agreed with your pension scheme to base minimum contributions on different elements of staff pay, so if this is the case you will need to apply different increases. Check your scheme documents to find out what elements of staff pay your scheme uses. If you are unsure speak to your scheme provider. Find out what increases apply to you if you are calculating contributions using different elements of staff pay using this link.

Telling your staff about the increases from 6 April 2019

Employers should inform staff about the increases and a template letter is available on the Pensions Regulator website, if required. Click here for more detail.

The impact of the Auto-enrolment contribution rise

The contribution increases are designed to help you save more for your retirement. The auto-enrolment rates above are the minimum, so you can opt to change what you do. If you are thinking of cancelling because this increase is too much, at least see what your options are. Think carefully before you opt out as in effect you are giving up extra money from your employer and generally sacrificing long-term cash for short-term gain. You should consider speaking to your independent financial adviser to discuss your options.

Implementing the increases

Your payroll processing software will need to be updated so these increases can be applied from 6 April 2019 onwards.

RPP Accountants provide comprehensive payroll support to clients and can help setting up your employee pension.

If you would like information about our payroll services please contact us or to speak to a member of our team.


Leave a Comment