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UK Pension- Qualifying Earnings Threshold not factored while determining Pension Calculation

edited Sep 11, 2024 8:19PM in Payroll and Global Payroll Interface (GPI) 1 comment

Summary:

We have a business scenario where an employee earns 30000 GBP Annually and employee is paid on a Monthly basis. The qualifying earnings threshold is 6240 Annually. Assuming the Percentage of EE contribution is 4%, then the expected EE pension contribution by client is .

Annual Salary:30000

Pensionable earnings:30000

Pensions Automatic Enrolment Assessable Earnings:30000

LEL threshold:6240

EE Contribution:4%

EE Contribution Amount:((30000-6240)/12)*0.04=79.20

However the System computes on the entire pensionable earnings without excluding the LEL Threshold which in the above example is (30000/12)*0.04=100

Can someone please suggest how this LEL is factored in calculation?

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