In the last article we covered Worker Types and the criteria which determine whether an employee is an Eligible Jobholder, a Non Eligible Jobholder or an Entitled Worker. These are:

  • Age; and
  • Earnings.

When looking at the earnings element, legislation dictates that it is Qualifying Earnings that are to be included in the earnings part of the assessment.

Assessment Date

The assessment date is the date on which an employee needs to be assessed for auto-enrolment. This may be:

  • The staging date
  • The employees start date if they joined after the staging date
  • The deferral date (the end date of an applied postponement period)
  • The first date of the next pay reference period if an employee has not yet been enrolled and is not within a period of postponement.

If on the assessment date, the employee meets the age criteria and the qualifying earnings within the relevant “Pay Reference Period” (PRP) are above £10,000pa (or £192 a week for a weekly payroll) the employee is an eligible jobholder and must be enrolled into the pension scheme as of the assessment date. This becomes their enrolment date.

If the employee does not meet the Eligible Jobholder criteria, the assessment date moves forward to the start of the next pay reference period.

What makes up Qualifying Earnings?

  • Salary
  • Wages
  • Commission
  • Bonuses
  • Overtime
  • Statutory Sick Pay
  • Statutory Maternity Pay
  • Ordinary or Additional Paternity Pay
  • Statutory Adoption Pay

It is for the employer to make reasonable judgment as to whether a payment falls under one of the listed items.

The total of the above listed elements make up qualifying earnings.  The relevant pay reference period is the one in which the assessment date falls and the earnings to be assessed are those which are paid to the employee within the relevant pay reference period.

It is important to remember that it is the pay date which is important for the assessment of earnings; the point at which the earnings are physically received into the account of the employee. The period of time the employee worked for this payment is irrelevant.

If you require further advice or assistance to determine the relevant pay reference period for your company, please contact the Payroll Advice Team at Peninsula.

Over the next few months, we will be covering automatic enrolment subject matter in bite size chunks for your information, from preparation – to staging – to day-to-day process.

The Payroll Advice Service at Peninsula is a free service available to Peninsula customers and we are also available to advise our customers on automatic enrolment legislation