What is Qualifying Earnings (Auto-Enrolment)?

Full Definition

Qualifying earnings is the specific band of a worker's pay used to calculate the statutory minimum pension contributions under automatic enrolment, running from a lower limit of GBP 6,240 up to an upper limit of GBP 50,270 for 2026/27 -- the same upper figure as the National Insurance Upper Earnings Limit. Only earnings that fall within this band count for the purposes of the minimum 8% total contribution (at least 3% from the employer, with the remainder typically made up by the employee, boosted by tax relief); earnings below GBP 6,240 or above GBP 50,270 are excluded from the qualifying earnings calculation even though the worker is still paid on their full salary. Qualifying earnings includes salary, wages, commission, bonuses, overtime and statutory pay such as Statutory Sick Pay or Statutory Maternity Pay, which differs from some employers' alternative "certification" basis for calculating contributions, where they instead use basic pay or total pay from the first pound, without the lower and upper limits, provided the resulting contribution level meets or exceeds an equivalent minimum standard set out in the auto-enrolment regulations. Because the lower qualifying earnings limit has been frozen for a number of years, more low earners now have some of their pay pulled into the qualifying band each time average wages rise, gradually increasing the pension contributions due even without any change to contribution rates.

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