At Remote People, we offer both Nest and Aviva pension schemes, each with its own method for calculating contributions. Here's how you can calculate the contribution costs for each scheme.
Aviva Pension Scheme
Based on Total Pensionable Earnings
Contributions are calculated on basic annual pay, excluding bonuses and commissions.
Example:
Salary: £45,000
Contribution: 3% of £45,000 = £1,350/year
Monthly Contribution: £112.50
Higher Contributions
If you wish to offer more than the statutory minimum, Aviva allows for higher employer contributions.
Nest Pension Scheme
Based on Qualifying Earnings
Contributions are calculated on earnings between £6,240 and £50,270, covering salary, bonuses, and statutory payments.
Example 1:
Salary: £55,000
Qualifying Earnings: £44,030
Contribution: 3% of £44,030 = £1,320.90/year
Monthly Contribution: £110.07
Example 2:
Salary: £45,000
Qualifying Earnings: £38,760
Contribution: 3% of £38,760 = £1,162.80/year
Monthly Contribution: £96.90
Minimum Contributions Only
The Nest scheme only allows for contributions at the statutory minimum level.
Key Points
Aviva Scheme: Ideal if you want to offer contributions above the statutory minimum.
Nest Scheme: Contributions are capped at the statutory minimum.
Earnings Cap: Nest contributions consider earnings up to £50,270.
For more details or specific scenarios, Remote People is here to assist.