Pension qualifying earnings are the band of your pay between £6,240 and £50,270 a year that your workplace pension contributions are worked out on. For the 2026/27 tax year both limits are unchanged, as is the £10,000 automatic enrolment trigger, so the contribution mechanics stay the same as recent years. The band covers more than basic salary: overtime, bonuses, commission, holiday pay, and several statutory payments all feed in, which is why the figure is usually higher than people expect.
What Pay Counts
Qualifying earnings include your regular salary or wages plus:
- Overtime
- Bonuses and commission
- Holiday pay
- Statutory sick pay
- Statutory maternity, paternity, adoption, shared parental, and parental bereavement pay
- Neonatal care pay
The statutory payments matter most if you take leave. Pension contributions keep flowing while you’re on maternity or sick pay, which protects your retirement savings during the months your take-home drops.1GOV.UK. Workplace Pensions: What You, Your Employer and the Government Pay
The 2026/27 Thresholds
Three numbers shape the whole system, and all three are frozen at the same levels they’ve held for several years.2GOV.UK. Review of the Automatic Enrolment Earnings Trigger and Qualifying Earnings Band for 2026/27
- Lower earnings limit — £6,240 a year. Pay below this floor is left out of the contribution calculation.
- Upper earnings limit — £50,270 a year. Pay above this cap is also left out, so high earners don’t contribute on every pound.
- Automatic enrolment trigger — £10,000 a year. The income level at which eligible workers must be enrolled automatically.
Because the thresholds have been held while wages have generally risen, more workers are drawn into the system each year and a larger share of each worker’s pay sits inside the band.
How Your Contribution Is Worked Out
The standard method, called the qualifying earnings or banded earnings approach, runs in three steps. Add up all the pay types listed above for the period. Subtract the £6,240 lower limit. Cap anything above £50,270. What’s left is the band contributions are charged on.
On a £30,000 salary, qualifying earnings are £30,000 minus £6,240, which gives £23,760. Percentages apply to that figure, not to the full salary. The statutory minimum total contribution is 8% of the band, split as follows:1GOV.UK. Workplace Pensions: What You, Your Employer and the Government Pay
- Employer minimum: 3%
- Employee minimum: 5%
- Total minimum: 8%
On that £23,760 band, the employer puts in at least £712.80 a year and you put in at least £1,188, for a combined £1,900.80 reaching the pension. Many employers pay more than 3%, so check your scheme rather than assuming you’re on the floor.
Payroll software handles the subtraction and the percentages each pay period, using the monthly or weekly equivalent of each threshold. If you earn above £50,270 the calculation simply stops at the cap, so nothing is deducted on income above the ceiling.3The Pensions Regulator. Earnings Thresholds
Tax Relief on Your Share
Your 5% doesn’t cost you a full 5% out of pocket. The government adds tax relief, and how it reaches your pension depends on which method your scheme uses.
Under a net pay arrangement, the contribution comes out of your salary before income tax is calculated. Relief is automatic at your highest rate, because the contribution reduces your taxable pay. A basic-rate taxpayer saving £100 only sees take-home drop by £80.
Under relief at source, the contribution comes out after tax. You pay 80% of it, and your pension provider claims the other 20% from HMRC and adds it to your pot. Higher-rate taxpayers have to claim the extra relief through self assessment or by contacting HMRC directly.1GOV.UK. Workplace Pensions: What You, Your Employer and the Government Pay
Net pay historically left very low earners worse off, because workers below the personal allowance missed the 20% top-up that relief-at-source members received. From 2025/26 onward, a government correction gives low earners in net pay schemes equivalent relief. If you earn under the personal allowance and your employer uses net pay, check that this top-up is reaching your pension.
Alternative Bases Your Employer May Use
Not every employer uses the banded method. Under a route called certification, employers can base contributions on a different definition of pensionable pay as long as the result at least matches what the qualifying earnings method would produce. There are three options, each with its own floor:4Nest Pensions. How to Calculate Contributions
- Basic pay basis. 4% employer minimum, 9% total. Pensionable pay covers salary and geographical allowances but not irregular items like overtime or bonuses.
- Near-total pay basis. 3% employer, 8% total. Pensionable pay must cover at least 85% of total pay across the workforce.
- Total pay basis. 3% employer, 7% total. Every pound is pensionable from the first pound, with no lower threshold subtracted.
The total pay basis has the lowest percentages because contributions start from pound one rather than skipping the first £6,240. For lower-paid staff this can mean a slightly bigger pension pot than the banded method would produce.
Salary Sacrifice and the Band
If you’ve agreed to a salary sacrifice arrangement, giving up part of your salary for a bigger employer pension contribution, your qualifying earnings are based on your reduced post-sacrifice pay, not the original figure.5The Pensions Regulator. Pension Schemes Under the Employer Duties That lowers your income tax and National Insurance and also changes the band contributions run on. The trade is usually worthwhile because the employer puts more in than the minimum, but it’s worth checking your payslip against the maths.
An employer cannot make automatic enrolment conditional on agreeing to salary sacrifice. If you decline, they must still enrol you and use the standard deduction method.
Who Gets Enrolled and Who Can Opt In
Automatic enrolment applies when all three conditions are met: you earn more than £10,000 a year, you’re aged between 22 and State Pension age, and you work (or ordinarily work) in the UK.6GOV.UK. Workplace Pensions: Joining a Workplace Pension When all three are ticked, your employer must enrol you in a qualifying scheme without you having to do anything.
The £10,000 trigger and the £6,240 lower earnings limit do different jobs, which is a common point of confusion. Someone on £9,000 sits below the trigger and isn’t enrolled automatically. Someone on £11,000 is enrolled, and contributions run on the band above £6,240, meaning £4,760 of qualifying earnings.
Falling outside the auto-enrolment criteria doesn’t lock you out of the scheme. If you have qualifying earnings but don’t meet the full criteria, either because you earn between £6,240 and £10,000 or because you’re 16 to 21 or between State Pension age and 74, you can send your employer an opt-in notice. They must then enrol you and pay employer contributions.7The Pensions Regulator. Employer Duties and Defining the Workforce
Workers with no qualifying earnings at all, typically because they earn below £6,240, can send a joining notice and the employer must arrange scheme membership. The employer is not required to contribute in that case unless the scheme rules say otherwise.