At Yonder, our mission is to increase access to core benefits for modern teams by providing a delightful way to issue and manage benefits internationally. 

We do this by going the extra mile and taking a different approach than others. Like integrating with insurers and pension providers and removing the manual back-and-forth involved in policy management. Our approach is to offer instant quoting and enrolment for employees so they can go from quote-to-covered in a few taps of our app and provide localised and consolidated payroll reporting that saves finance teams hours of pain every month. This all makes life easier for Finance and People teams.

Now, we're launching HRIS Sync, so companies can connect with the world's leading HR information systems (HRIS) and make core benefits work on autopilot, no matter where your team members are—no more double entry. Bridging the gap between disconnected tools and benefits. Reducing the error risk and driving real efficiencies within the teams who manage benefits.

Speed up employee onboarding and keep employee data in sync with your benefits

Employee data flows seamlessly from tools like Personio, Workday, HiBob and others into Yonder to automate administration. Sync data such as name, email, date of birth, salary, location and national insurance/PPS number with your benefits – if it updates in your HR tool, it updates with your benefits provider. This means many of the key points of friction now happen in the background;

This culminates in companies being capable of scaling benefits more than 10x faster than the traditional way and helps People and Finance teams focus on what matters.

Connecting to your HR tool is straight-forward

You can now connect Yonder to the following HR tools

With so much more to come, this is just the start. We’re working on ways to automate even more missing pieces of the global benefits puzzle. More automation–– like rule-based employee enrolment, a Yonder Slack app, local payroll integrations and more. 

Would you like to learn more about how this could work for you and your company? Book a 30-minute demo with our team 

Introducing HRIS Sync: Automate employee benefits management 

Employee pensionable earnings play a significant role in workplace pension schemes in the UK.

For instance, how much an employer contributes to an employee’s pension fund directly depends on how they calculate their pensionable earnings. 

Let’s discuss more about pensionable earnings, why they’re essential, and how to calculate them accurately.

 are the portion of an employee’s earnings that employers use to determine both parties’ pension contributions. It’s also known as an employee’s pensionable salary.

For both the employer and the employee, the contribution is a certain percentage of the pensionable earnings.

You can calculate pensionable earnings in two ways based on your 

 (we’ll discuss this in the next section). 

Regardless of the method, you must meet certain minimum contribution conditions. In other words, you must contribute a certain minimum percentage of the pensionable earnings.

The minimum contribution amount can vary based on whether the pension scheme is a qualifying plan or not.

A qualifying pension scheme, with respect to auto-enrolment, is a tax-registered scheme that explicitly meets the quality standards set by the UK government, such as:

As of August 2023, the minimum contribution amount for qualifying auto-enrolment pension schemes is 8% of the employee’s pensionable earnings — where employers contribute 3%, and employees pay the remaining 5%.

If your workplace pension scheme doesn’t meet the quality standards explicitly, you’ll need to self-certify that your scheme is a qualifying one (more on this in the FAQ section).

In such cases, the minimum contribution rates could differ from the 8% limit for qualifying schemes.

Similarly, some occupational pension plans, like the 

, have several member contribution tiers based on employee pensionable pay.

2 Ways to Calculate Pensionable Earnings in the UK (+ Examples)

You can calculate pensionable earnings through:

1. How to Calculate Pensionable Earnings Through the Qualifying Earning Method

This method is usually the default approach if you run a qualifying pension scheme that explicitly meets all the quality requirements set out by the government.

These are the employee earnings — before any Income Tax and National Insurance contributions are deducted — that fall within a salary range set by the UK government. 

The qualifying earnings limits for the tax year 2023-24 are as follows:

Here’s those earning thresholds broken down over some common pay periods:

4 Steps to Calculate Pensionable Earnings Using Qualifying Earnings

Here’s how you can work out an employee’s pensionable earnings (and your contributions) on the qualifying earnings basis:

Consider an employee earning a base annual salary of £50,000, a bonus of £4,500, and Holiday Pay amounting to £500.

What Happens If an Employee Earns Less Than £6,240 Per Year?

They won’t be auto-enrolled into the workplace pension scheme. 

But if they’re between 16 and 75 years old, they can still opt in for a company pension scheme and request employer contributions. 

What Happens If an Employee Earns Between £6,240 and £10,000 (Inclusive) Per Year?

They won’t be auto-enroled into a pension scheme. 

But if they’re between 16 and 75, they can opt-in and are even eligible for the minimum employer contribution for the pension scheme. The employer must oblige in this case.

2. How to Calculate Pensionable Earnings Through Pensionable Pay Method

Employers commonly use this method if they’ve self-certified their workplace pension scheme. You consider an employee’s salary and other earnings 

 applying the qualifying earnings' upper or lower limits. 

When using this approach, the pensionable pay must be

equal to ‘basic pay' over the certification period.

You can calculate pensionable pay in three ways: 

Each method has different minimum contribution requirements.

You base your pension contribution calculation on the employee’s basic salary or wage before deductions, plus any Holiday Pay. You may also include Statutory Sick Pay, maternity and paternity leave benefits, adoption pay, etc.

 any commission, bonuses, overtime, or other variable payments like relocation and travel allowance.

You work out your contributions on the employee’s gross earnings (excluding overtime, bonus, and commissions), ensuring the final pensionable pay is at least 85% of the employee’s total earnings.

The employee’s total earnings will include all forms of payments from the employer, including salary, bonus, commissions, and other performance-related pay.

In this method, you consider all elements of employee earnings, including their:

Let’s consider a scenario where an employee’s yearly earnings are as follows:

, the pensionable earnings will be basic salary plus Holiday Pay — £30,800. 

The employer contribution is 4% of the £30,800 = £1232.

, the pensionable earnings will be a total of all earnings — £31,000 (£30,000 + £800 + £200). In this case, the employer’s contribution is 3% of the pensionable earnings — £930.

3 Factors That Impact How You Calculate Pensionable Earnings

The method you use for calculating pensionable earnings — i.e., basic pay, qualifying earnings, or total earnings — can be affected by several factors, such as:

Depending on the nature of the pension benefit scheme, the method of calculating pensionable income can vary. 

For example, ‘qualifying earnings’ are commonly used for defined benefit schemes. 

In contrast, employers typically opt for the basic pay method for self-certified 

Moreover, each scheme may have specific rules that determine the calculation method. 

For instance, a private pension provider may have different regulations than a public sector offering like the National Health Service or NHS pension scheme.

2. The Nature and Amount of Employee’s Earnings

The pension calculation method can also depend on the type of employee earnings.

For example, consider an employee who frequently works overtime and receives commissions. You can prefer the total earnings basis over basic pay to ensure that the pension contributions are fair and proportionate to the employee’s gross income.

Or, if the employee’s earnings exceed the upper qualifying earnings threshold, you may opt for the pensionable pay method.

Similarly, you may also need to consider the total amount of pensionable earnings, especially to meet the minimum contribution requirements.

Some employers may have their own rules for calculating pensionable earnings, which may override the general rules. 

However, they’ll have to ensure they meet the minimum contribution requirement for the scheme type.

Why You Must Calculate Pensionable Earnings Accurately

Here’s why pensionable earnings must be calculated precisely:

What Are Pensionable Earnings in the UK? + How to Calculate

The triple lock is a safeguard introduced by the UK government to ensure that the State Pension remains financially viable for pensioners.

It protects the State Pension from losing value over time, maintaining the purchasing power of pensioners.

Let’s explore the intricacies of the triple lock system and address the uncertainty around its future.

What Is the Triple Lock Pension in the UK and How Does it Work?

The triple lock is a guarantee that the State Pension payments won't erode with rising inflation. It was introduced in 2010 by the coalition government led by then Prime Minister David Cameron.

 to which the UK government ties the annual State Pension increases.

Each year, the UK government increase the State Pension by the highest of these three components:

Let’s say in a given year, the average wages increase by 2%, but inflation rises at a faster rate, say 3%. 

In the following year, the State Pension wouldn't just increase by 2% to match earnings; it would increase by 3% to keep pace with inflation. 

If the CPI and average earnings increase at a rate lower than 2.5%, the State Pension would still rise by the baseline rate of 2.5%.

The UK State Pension in the tax year 2023-24 saw a 10.1% increase over the 2022 rates.

According to the UK Treasury data, inflation grew by 10.1% in 2022  — which was higher than the 5.2% growth in average earnings and the 2.5% baseline.

Who is eligible for a ‘triple lock-protected State Pension?

The triple lock guarantee applies to everyone receiving the basic State Pension (pre-April 2016) and the new State Pension (post-April 2016).

the Basic and New State Pension in the UK.

3 Ways the State Pension Triple Lock Scheme Benefits Pensioners

1. Safeguarding Retirement Income from Inflation

The triple lock scheme ensures that pensioners’ income is steady and in line with the rising cost of living. 

For instance, if price inflation hits 3%, the pension rises by 3%, protecting retirees from reduced spending power. 

And as we mentioned above, inflation rose to 10.1% in 2022, but pensioners were cushioned by the triple lock, receiving a 2023 State Pension increase consistent with inflation rates.

The triple lock guarantees pensioners a minimum annual increase of 2.5% on their State Pension. 

So, in a year when price inflation and wage growth are low (below 2.5%), pensioners will still see a respectable increase in their pension payments.

The State Pension triple lock ensures that pensioners are not left behind as the nation’s earnings rise. 

For instance, in 2019, wage growth was at 3.9%, and under the triple lock, the 2020 State Pension increased accordingly – from £168.60 to £175.20 per week.

But with all its benefits, the State Pension triple lock system has had moments of uncertainty.

Why Was Triple Lock Protection Suspended in 2022?

In a surprising move, the Prime Minister at the time, Boris Johnson, forfeited the triple lock protection for the 2022 State Pension increase.

The economic upheaval caused by the Covid-19 pandemic.

According to the UK Office for National Statistics, there was a significant surge in average wage growth between April and June 2022.

Following the pandemic, wages rebounded sharply as 

This would’ve triggered a disproportionately large increase in the State Pension under the triple lock formula, putting the government under immense financial strain.

The situation prompted the UK government to 

 suspend the triple lock for the financial year 2022-23.

So, on what basis did the State Pension increase in 2022-23?

The government based the State Pension increase on the inflation rate – which was 3.1% for the given period. The goal was to aim for a balance between protecting pensioners’ income and managing budget responsibility.

While the suspension of the triple lock in 2022 was temporary, it has raised questions about the scheme's future.

Is the Triple Lock for the UK State Pension Getting Scrapped?

The 10.1% rise in 2023 State Pension increased the government’s pension costs by

. The total pension expenditure is expected to increase further and hit £135 billion by 2025.

Financial Experts predict that by 2025, the 

 could cost Britain more than the combined spending on education, policing, and defence.

A double lock would link pension increases to inflation or average earnings (whichever is higher) and exclude the 2.5% baseline increase option.

Theresa May, the former British Prime Minister, proposed replacing the triple lock with the double lock in 2017. But the idea failed to get enough support back then and couldn't get implemented.

Proponents argue that the double lock would ease the financial burden on taxpayers while providing reasonable protection for pensioners against rising living costs.

However, despite mounting pressure, Prime Minister Rishi Sunak has reassured vulnerable pensioners that the triple lock is here to stay — at least for the time being. 

In their 2022 Autumn Statement, the government announced that it would reinstate the State Pensions triple lock for 2023-24.   

But unlike the currently in-power Conservative Party, the Labour Party hasn't committed to continuing the triple lock policy if it comes to power.

What’s the State Pension Forecast for 2024?

The next triple lock-protected pension increase will be effective from April 2024. 

The government will consider the inflation rate in September 2023 and average earnings between May-July 2023. 

Considering this, financial experts predict the State Pension to rise by at least 7%, going up to 8.2% 

 With the triple lock policy’s future uncertain, you must consider other ways to make your retirement income inflation-proof.

4 Ways to Protect Your Retirement Income From Inflation

The best way to safeguard your retirement income from inflation is to plan ahead and make additional contributions to your pension pot. Also consider investing in securities that promise good risk-adjusted returns. 

This approach also ensures you have a sizeable pension pot if you’re planning an early retirement. 

1. Contribute More to Workplace or Personal Pension Schemes

If you’re eligible for auto-enrolment, your employer will typically enrol you in a private pension scheme.

Pensionable earnings refer to the portion of your salary that your employer considers for calculating pension contributions.

You can still request your employer to be included in a workplace pension in some cases. 

You can also become a member of a personal pension scheme and increase your contribution incrementally.

As an employer, you can contribute more to an employee’s pension fund than the required auto-enrolment minimum (3% of pensionable earnings).

But that could be a hard ask if you already spend excessive time and money to manage your workplace pension scheme.

Set Up Cost-Effective UK Workplace Pension With Yonder

Yonder is a digital pension platform that lets you offer a workplace pension scheme to your UK team without the burden of brokerage and administrative costs.

, a trusted pension provider in the UK, to help employers set up and manage pensions compliantly from anywhere in the world.

2. Invest in an Individual Savings Account (ISA) or Lifetime ISA

An individual savings account is a tax-efficient way to save and withdraw money. It allows you to save up to £20,000 per year in cash or investments.

Similarly, a Lifetime ISA, or LISA, is a government-backed savings account that’s designed to help you save for a first home or retirement.

The government adds a 25% bonus on your yearly contributions up to £4,000 per year, making it a smart, inflation-beating option.

You give your pension pot more time to grow when you delay taking your pension. 

This approach increases your monthly pension payments and fortifies your income against the erosive effects of inflation.

A salary sacrifice scheme lets you reduce your take-home salary and instead put the amount into your pension fund (or other non-cash benefits).

It reduces your taxable income, so you’ll have to pay less income tax. This leaves you with more money to invest in your pension fund.

Secure Your Pension Income Above and Beyond the Triple Lock

The UK government’s triple lock policy protects your retirement income from inflation.

While the current government has committed to continue the policy, its future remains uncertain.

UK State Pension Triple Lock: How it Works + 3 Key Benefits

A pension scheme is a savings arrangement that helps secure your financial well-being in retirement. 

Various government and employer-sponsored pension schemes are available in Ireland. You also have personal pensions you can set up for yourself. 

But how do these Irish pension schemes work?

How can you get tax relief on your pension contributions?

Keep reading to get answers to all these questions and more.

Ireland's pension system comprises government-backed state pensions as well as private-sector occupational and personal pension schemes.

Here's a quick look at these pension schemes: 

Ireland's social welfare pension schemes consist of the

Both are weekly payments made by the Department of Social Protection to people aged 66 and above. 

For more information, check out our detailed guides on these schemes: 

Occupational pension schemes (aka company pension plans) in Ireland are employer-sponsored pension plans that offer regular income to employees in retirement. 

Two popular occupational pension schemes are defined contribution and defined benefit schemes. 

Are you an employer looking to offer an occupational pension scheme in Ireland?

 — a digital pension app built for modern teams.

 that lets you enrol employees in a corporate Master Trust, giving your team complete control over their contributions.

 to automate and scale your retirement benefits effortlessly. 

A personal pension scheme (aka private pension scheme) is a retirement savings plan individuals set up through an investment or life assurance company. 

These are typically for self-employed people or workers whose employers don't offer occupational pension plans. But anyone can take one out - only they may not get tax relief on it if they already receive an occupational pension.

The two types of personal pension plans in Ireland are Personal Retirement Savings Accounts (PRSAs) and Retirement Annuity Contracts (RACs). 

The Irish government plans to introduce the automatic enrolment retirement savings system in 2024. 

, including its eligibility criteria and contributions. 

How Are Pension Schemes in Ireland Taxed?

Generally, all income you generate from Ireland's state, occupational and personal pension schemes is taxable. 

You must pay income tax on your annual pension earnings if you're an Irish citizen aged 66 and above. 

Here's an overview of how your pension income is taxed at retirement:

2. Tax on Personal, Occupational, and State Pensions

Let's take a look at how each pension scheme is taxed in Ireland.

If you joined a PRSA or an RAC, your pension will be taxed under the PAYE (Pay-As-You-Earn) system, which means your pension provider will deduct the tax from your pension income before it's paid. 

You also have the option to use the money accumulated in your pension pot to purchase an annuity in retirement. 

An annuity is a retirement payment option that guarantees you a regular monthly income in retirement for the rest of your life. 

Income from annuities is also taxable within the PAYE (Pay-As-You-Earn) system and is subject to the Universal Social Charge (USC). This means your annuity provider automatically deducts the tax (usually at a higher tax rate of 40%) before you receive your payment.

Occupational pension schemes are taxed under the PAYE system and are subject to the USC. 

However, they are exempt from PRSI (Pay Related Social Insurance). 

Under the PAYE system, your pension income is taxed every time you receive your salary. This means that your employer deducts the income tax and USC from your paycheck and pays the deducted amount to the Revenue. 

Moreover, in the case of an occupational pension scheme, there is a cap on the maximum pension income you can receive at retirement. This cap typically amounts to about two thirds

of your final salary — provided you've completed at least 10 years of service.

You may also have to pay tax on your State Pension. However, the tax isn't deducted at source. 

Here's how your State Pension will be taxed under different scenarios:

A. If You Receive Both State and Occupational Pension Payments 

B. If You Receive Only the State Pension Payment 

 from your pension pots as a tax-free lump sum on retirement. 

The withdrawal limits may also vary based on your pension arrangement type: 

An Approved Retirement Fund (ARF) is a post-retirement fund where you can invest the amount accumulated in your pension pot as a lump sum. 

It lets you withdraw money from the fund anytime you want to ensure you have flexible and regular income in retirement. 

Any money taken from an ARF is regarded as income and subject to PAYE tax rules, which include:

. This rate increases to 5% once you reach age 71. 

However, if your pension fund exceeds the €2 million threshold when you're over 61, the starting minimum withdrawal or imputed distribution rate is increased to 6%.

How Can You Get Tax Relief on Pension Scheme Contributions?

Introducing HRIS Sync: Automate employee benefits management

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