How Qualifying Earnings Affect Your Pension
Qualifying earnings are the portion of your salary used to calculate minimum auto-enrolment pension contributions. For 2025/26, qualifying earnings are your income between £6,240 and £50,270, giving a maximum qualifying earnings band of £44,030.
On a £30,000 salary, your qualifying earnings are £23,760. At the minimum 5% employee contribution, this means £1,188 per year (£99/month) deducted from your pay. Your employer adds at least 3% (£713/year).
Some employers calculate pension contributions on total earnings rather than qualifying earnings, which is more generous. Check your pension scheme documentation or ask your HR department. Use our pension calculator to model different contribution levels.
How Qualifying Earnings Works in Practice
Qualifying earnings are the portion of your salary used to calculate minimum pension contributions under auto-enrolment. For 2025/26, qualifying earnings are between £6,240 and £50,270. Minimum contributions are 8% of qualifying earnings (5% employee, 3% employer). This means the first £6,240 and anything above £50,270 are excluded from the minimum pension calculation.
Practical Tips
On a salary of £30,000, your qualifying earnings are £23,760 (£30,000 minus £6,240). The minimum 5% employee contribution is therefore £1,188/year (not £1,500 as it would be on total salary). Some employers calculate contributions on total salary rather than qualifying earnings, which results in higher contributions. Check your pension scheme terms to understand which basis applies to you.
Related Topics
The qualifying earnings band is reviewed annually. Using qualifying earnings rather than total salary means pension contributions on modest salaries are lower than many people expect. See auto-enrolment for the broader framework.
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