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are expenses considered qualifying earnings?

are expenses considered qualifying earnings?

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I have qualifying earnings listed as:

  • Salary
  • Wages
  • Commission
  • Bonuses
  • Overtime
  • Stat sick pay
  • Stat mat pay
  • Ordinary or additional stat pat pay
  • Stat adopt pay

would it be safe to say then that as a rule of thumb - not ni-able = not a qualifying earning for pension deduction?
in particular in relation to expenses.


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By neiltonks
02nd Oct 2013 13:32

Sort of!

The easy bit first - expenses (i.e. reimbursement of costs incurred by the employee in carrying out their duties) are certainly not included in Qualifying Earnings.

The list you've quoted above is in fact the legal definition of qualifying earnings. Each employer has to decide which of their own items of pay come into those categories. The 'NI test' is a good rule of thumb but it's not perfect. Despite this being suggested during the consultation process, the government decided not to tie the definition of qualifying earnings to that for NI. This leaves leeway and therefore ambiguity.

For example, the Pensions Regulator has been fond of quoting the suggestion that a car allowance might be part of salary/wages in respect of someone for whom it's provided due to their seniority, but might not come into this definition when paid to someone like a salesperson for whom a car is a vital tool of their job. It's NI-able in either case, of course, but may or may not be part of Qualifying Earnings depending on the circumstances!

Don't you just love how the government has gone out of its way to make auto enrollment simple to operate!

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By alan.falcondale
03rd Oct 2013 13:50


many thanks Neil.
And to think, the KISS acronym seems to have been completely dismissed by all government departments when devising these new games.  GTP-V, Grand Theft Pensions.....

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