no employers tax to pay, also pension - When will it start?
It is important to divorce certain elements of the proposals, NEST will start next year; however auto enrolment will be phased in between October 2012 and 2016, by which time all firms will be required to have enrolled staff in NEST or provided a suitable alternative.
The largest employers will be expected to join first with smaller firms joining later.
How much will have to be paid in?
The aim is to have a total contribution of 8% by 2017; this is split between employees paying 4%, employers 3% and the government, in the form of tax relief 1%.
However contributions will be phased in as follows:
•Until October 2016, the minimum overall level of contributions will be 2%, with 1% coming from employers
•From October 2016 to September 2017, total contributions will be 5% with 2% coming from employers
•From October 2017, the total minimum contribution level will be 8%, with employers contributing at least 3%
Both employees and employers will be able to increase contributions above these levels should they choose to do so.
Unlike most existing work based pensions the contributions will be calculated in an employees pay above the National Insurance earnings threshold of £5,715, for example if an employee was earning £15,000 per annum their own contribution would be approximately £23 per month.
The contributions into NEST are also currently capped at £3,600 per annum, although it is possible that this level will be abolished by 2017.
hope that helps,
more info can be found at
www.investmentsense.co.uk and put staff pensions in search box,