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How do my contribution levels and earnings basis affect my contribution rates?

When you set up your contribution rates we’ll ask you to add contribution levels and an earnings basis.

The options you have for your contribution rates are:

  • Pay the current minimum contribution rates that increase automatically as the legal minimums go up – We’ll set the contribution rates at the legal minimum rates that you and your workers need to pay. The minimum contribution rates will automatically increase as decided by legislation. This means you don’t need to create new groups when the contribution rates increase in 2019.
  • Pay the 2019 minimum contribution rates straight away so there’ll be no increase. These are higher than the current minimum contribution rates – The contribution rates are immediately set to the legal minimum that will be required in 2019. As you’ll pay this rate from your staging date there’ll be no need to make changes to it in the future.
  • Choose your own contribution rates - You can choose to use your own contribution rates. It’s important that the rates you choose still meet the legal minimum contribution rates.

The contribution rates you choose here are the minimum percentages we’ll expect each pay period. You can pay more than the minimum rates by increasing the contribution amount in the payment schedule. This can be done if you’ve set an upper limit of contributions for your group. For more information please see Why would I set an upper limit on contributions?

The rates may vary depending on the earnings basis selected. The options you have to choose from for your earnings basis are:

  • qualifying earnings
  • pensionable earnings for Tier 1 certification
  • pensionable earnings for Tier 2 certification
  • pensionable earnings for Tier 3 certification
  • your own definition of pensionable earnings that you won’t certify.

For more information about each earnings basis please see How do I calculate contributions?

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