Pension Auto-Enrolment cost
calculator (UK)

See your minimum employer pension contribution on qualifying earnings, for one employee or a whole team.

Your numbers

Salary (£)

Number of employees at this salary

Employer pension cost

What is the minimum employer pension contribution in the UK?

3% of qualifying earnings, the band between £6,240 and £50,270 for 2026-27. The total minimum is 8%, with the employee covering 5% including tax relief.

How we calculated this

The minimum employer contribution is 3% of qualifying earnings, not of salary. Qualifying earnings for 2026-27 are the band from £6,240 to £50,270, so we take the salary you entered, remove everything below £6,240, ignore everything above £50,270, and charge 3% on what is left. That gives the cost per employee; multiplied by headcount it gives the annual bill for the team. Every salary above the upper limit costs the same, which surprises people. The working, the assumptions and the sources are below.

New to the term? Read the plain-English definition of pension auto-enrolment in the HR Glossary.

Your working

Assumptions

Uses the 2026-27 qualifying earnings band of £6,240 to £50,270 and the 3% employer minimum. The band was held at 2025-26 levels; the government reviews it each year, so re-run this after the next review.
Assumes every person at the salary is enrolled and contributing. Employees who have opted out cost nothing, and anyone earning under the £10,000 trigger is not enrolled automatically but can opt in, so a real payroll usually sits a little under this figure.
Assumes contributions are calculated on qualifying earnings. Employers who certify an alternative basis on full pensionable pay use different minimums (typically a higher percentage on a wider base), so their cost is higher than shown.
Ignores the employee's 5% and the tax relief inside it, scheme charges, salary sacrifice arrangements, and any contribution above the minimum. Many employers pay more than 3% by choice or under a contract; this is the floor.

Sources

The Pensions Regulator, "Earnings thresholds" (qualifying earnings £6,240 to £50,270 and the £10,000 earnings trigger for 2026-27), accessed August 2026
The Pensions Regulator, "Making contributions to your pension scheme" (3% employer minimum inside the 8% total, what counts as qualifying earnings), accessed August 2026
GOV.UK, "Workplace pensions: what you, your employer and the government pay" (the 3% and 5% split and tax relief), accessed August 2026

What to do about it

The pension line is a fixed cost of employing people. It only earns its keep if they stay long enough to value it, and most people who leave do not leave over the pension. These steps are for whoever owns the benefits budget or the retention numbers, whether that is one person or two.

Budget on the band, not the salary

Take the per-employee figure above into the headcount plan and the finance model, and note that anyone above £50,270 costs the same as someone on £50,270. Applying 3% to gross pay is the most common error in this line, and it hides money you could spend elsewhere.

Check the basis your scheme actually uses

Qualifying earnings, or a certified alternative on full pay? The answer changes the cost by hundreds of pounds a head. Confirm it with the scheme and note it beside the figure. Check the opt-out rate while you are there.

Ask whether people know what the contribution is worth

Pension is the benefit employees rate highly and understand least. Show the employer contribution in pounds on the payslip and in the offer letter. A benefit nobody can see does no retention work at all.

Where a tool helps

Find out why people actually leave before you spend more on keeping them

Before raising the contribution to compete for talent, look at your last twelve months of exits by manager, tenure, team and role. If the pattern is a manager or a workload, a bigger pension will not change it, and the money is better spent on the cause.

The contribution is law.
Staying is a choice.

Compono Engage is an employee engagement platform that reads culture and climate alongside work personality, so you can see which teams are drifting and why while the people are still on the payroll. Most tools in this category run an annual survey and report a score; Engage shows the pattern behind the exits in language a manager can act on.

Step 4 asks why people leave before you spend more on keeping them. Engage answers it continuously, so the contribution above goes to people who are staying for reasons you understand, and the retention money goes where the problem actually is.

See how it works

Compono Engage

8%+

reduction in turnover

Common questions

Is the 3% calculated on total salary?

No. It applies to qualifying earnings only, so the band between £6,240 and £50,270. This is why the employer cost on a £60,000 salary matches the cost on a £50,270 salary.

What is the auto-enrolment earnings trigger?

£10,000 a year. Above that, an eligible jobholder is enrolled automatically, though they can opt out.

Can we pay more than the minimum?

Yes, and many employers do, either as a higher percentage or on full pensionable pay using a certified alternative basis. This calculator shows the statutory floor on qualifying earnings.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with GOV.UK or your own adviser. Last reviewed July 2026.

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