What are contribution rates?

Contribution rates tell us what you’ll pay for each group of workers you enrol into NEST.

When you set up with NEST we’ll ask you to add a set of rates for both employer and worker contributions. This confirms the minimum contributions you and your workers will pay.

Choosing your contribution rates is an important part of your scheme set-up. The rates you choose will form part of your payment schedule which is a record of what you’ve legally agreed to contribute for your workers.

For more information about payment schedules please see How is a payment schedule created?

The part of salary you use to calculate contributions is called the earnings basis. You’ll tell us which earnings basis you’d like to use. You’ve got the flexibility to choose which earnings basis best suits your organisation’s needs. However, your choice will affect the minimum contribution rates you’ll need to pay to meet your employer duties.

You can choose one of the following earnings bases:

• Qualifying earnings. Please see How do I calculate contributions if I’m using qualifying earnings? for more information.
• Certification tiers 1, 2 or 3. Please see How do I calculate my contributions using certification? for more information.
• Custom. This is where you can set your earnings basis and contribution levels to whatever you want. Please see What should I do if I wish to choose my own contribution rates and pensionable pay? for more information.

You’ll need to let your workers know what earnings basis you’re going to use when you send them statutory communications. You’ll need to send these to your workers before you enrol them into NEST. The communications you send should explain when you’re planning to enrol them, what earnings basis you are using and the contribution rates you’ve chosen.