TL;DR: "Qualifying earnings" in the UK is the statutory definition under the Pensions Act 2008 that sets the band of earnings used to calculate the minimum automatic enrolment pension contributions. For the 2025-26 tax year qualifying earnings are gross earnings between 6,240 pounds and 50,270 pounds, made up of: salary or wages, commission, bonuses, overtime, statutory sick pay, statutory maternity / paternity / adoption / shared parental pay. The minimum total contribution under auto-enrolment is 8 percent of qualifying earnings (3 percent employer, 4 percent employee, 1 percent tax relief), although many employers contribute more under their own scheme rules. Employers using qualifying earnings as the basis (Tier 1 certification) calculate contributions only on the band - so the first 6,240 pounds and anything above 50,270 pounds is excluded. Other certification bases (Set 1, Set 2, Set 3 under Section 28 of the Pensions Act 2008) allow contributions on a broader pay definition with different minimum percentages.
Last reviewed May 2026
Qualifying earnings is the technical term for the band of earnings on which UK auto-enrolment pension contributions are calculated. The phrase appears in payroll outputs, pension scheme literature, and HMRC PAYE communications, and is often confused with related concepts like "pensionable earnings", "basic pay", or "total earnings". The differences matter because they change the size of the pension contribution.
This guide sets out what qualifying earnings actually mean under the Pensions Act 2008, the lower and upper limits and how they are reviewed, the income types that are and are not included, how the minimum contribution percentages are applied to qualifying earnings, the alternative certification bases an employer can use, and how the calculation interacts with salary sacrifice and bonus payments.
The statutory definition
Section 13 of the Pensions Act 2008 defines qualifying earnings as the worker's gross earnings within a band set by statutory instrument and reviewed annually by the Department for Work and Pensions (DWP). For the 2025-26 tax year the band is 6,240 pounds to 50,270 pounds (the lower limit aligns with the National Insurance lower earnings limit and the upper limit aligns with the National Insurance upper earnings limit / income tax basic-rate threshold).
The components that count as earnings for the qualifying earnings definition are listed in section 13(3) of the Act: salary and wages, commission, bonuses, overtime, statutory sick pay, statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay. Other income types (dividends, rental income, pension income, redundancy payments above the 30,000-pound exemption) are not qualifying earnings.
Both the lower and upper limits are reviewed annually. The lower limit has been frozen at 6,240 pounds since 2021-22 (the DWP has discretion to maintain the freeze to support broader auto-enrolment policy goals). The upper limit moves with the income tax personal allowance / basic-rate threshold.
Why the band matters
Auto-enrolment minimum contributions are 8 percent of qualifying earnings, split as 3 percent employer, 4 percent employee (after tax relief, the actual deduction from gross pay is 5 percent gross / 4 percent net for a basic-rate taxpayer) and 1 percent tax relief from HMRC. The 8 percent applies only to the slice of earnings within the band, not to total earnings.
For an employee earning 30,000 pounds a year, qualifying earnings are 30,000 - 6,240 = 23,760 pounds. The minimum total contribution is 8 percent of 23,760 = 1,901 pounds a year. The employer pays 712.80 pounds (3 percent), the employee 950.40 pounds gross (4 percent), and HMRC adds 237.60 pounds in tax relief (the 1 percent).
For an employee earning 60,000 pounds, qualifying earnings are capped at 50,270 - 6,240 = 44,030 pounds. The minimum total contribution is 8 percent of 44,030 = 3,522 pounds. The earnings above 50,270 pounds attract no auto-enrolment minimum contribution unless the employer's scheme uses a different (broader) certification basis.
What counts as earnings and what does not
The PA 2008 list is exhaustive for qualifying earnings purposes. Items included: salary, wages, commission, bonuses, overtime, statutory sick pay (SSP), statutory maternity pay (SMP), statutory paternity pay (SPP), statutory adoption pay (SAP) and statutory shared parental pay (ShPP). All are gross figures before income tax and NIC.
Items excluded: contractual sick pay or maternity pay over and above the statutory amount (often classed as "occupational" sick pay - some schemes include this as pensionable earnings under their own definition, but it is not part of statutory "qualifying earnings"), benefits in kind, dividends from employer shares, redundancy or termination payments, pension income, dividend or rental income, allowances reimbursing actual expense (mileage, professional subscriptions reimbursed, working from home).
Salary sacrifice complicates the picture. A salary sacrifice arrangement reduces the gross salary (in exchange for the employer paying directly into the pension or providing a benefit). The reduced salary is then the qualifying earnings figure. This means the qualifying earnings drop, the percentage-based contributions drop, but the total pension going in increases because the sacrificed amount is contributed directly. The employer's auto-enrolment scheme must be carefully designed to remain compliant when salary sacrifice is used; many schemes use a "pensionable salary" notional figure that is the pre-sacrifice salary, to keep contributions on the higher base.
The alternative certification bases
Employers can choose to calculate contributions on a basis other than qualifying earnings, as long as the alternative satisfies the certification test under section 28 of the Pensions Act 2008. Three alternative bases are commonly used.
Set 1: minimum 9 percent total contribution on "basic pay" (a narrower definition that excludes overtime, bonus and commission), with at least 4 percent from the employer.
Set 2: minimum 8 percent total contribution on basic pay, where basic pay must be at least 85 percent of total pay across the workforce. Employer minimum 3 percent.
Set 3: minimum 7 percent total contribution on total pay (the broadest definition, including all earnings). Employer minimum 3 percent.
The "tiered" or "certification" approach allows employers with workforces where pay structure does not fit cleanly with the qualifying earnings band to use a contribution basis that is administratively simpler while still meeting auto-enrolment minima. The employer must certify the scheme on at least an annual basis using one of these three sets, or stick with qualifying earnings (Tier 1).
The minimum contribution percentages
The auto-enrolment minimum contribution percentages are set in primary legislation and amended through regulations. The current schedule is: 8 percent total of qualifying earnings (3 percent employer, 4 percent employee, 1 percent tax relief from HMRC). The 8 percent applies from 6 April 2019 onwards; earlier years used phased lower percentages during the auto-enrolment rollout.
The amounts are minimums. Many employers contribute more under their own scheme rules: 5 percent or 6 percent employer contribution is common in well-paid sectors, with the employee contribution structured to match. Generous employer schemes go higher still.
Employees can opt to contribute more than the minimum, subject to the annual pension allowance (60,000 pounds in 2026-27, taper for very high earners). Additional voluntary contributions reduce taxable income and can be a tax-efficient way to top up pension savings, particularly for higher-rate taxpayers.
Auto-enrolment thresholds and eligibility
An "eligible jobholder" is automatically enrolled in a qualifying workplace pension scheme by the employer. The criteria are: aged 22 or over, under State Pension age, working in the UK, and earning above the auto-enrolment trigger (10,000 pounds for 2025-26).
Workers earning between the qualifying earnings lower limit (6,240 pounds) and the trigger (10,000 pounds) are "non-eligible jobholders" - they are not auto-enrolled but can opt in and receive employer contributions. Workers earning below 6,240 pounds are "entitled workers" - they can opt in but the employer is not required to contribute.
The trigger has been frozen at 10,000 pounds since 2014-15. The Pensions Act 2008 amendment passed in 2023 lowered the lower age limit to 18 and removed the lower limit on qualifying earnings (set both to zero), but implementation depends on a commencement order that had not been made at the time of writing.
How we verified this
The qualifying earnings definition reflects section 13 of the Pensions Act 2008. The minimum contribution percentages reflect section 20 of the same Act and subsequent commencement and amendment orders. The certification bases (Set 1, Set 2, Set 3) reflect section 28 of the Act. The lower and upper limits and the auto-enrolment trigger reflect the DWP's annual review and the published threshold for 2025-26. The 2023 amendments removing the lower age limit and the lower qualifying earnings limit are on the statute book pending a commencement order. No specific pension provider names, employer contribution rates, or DWP reference numbers have been invented; the figures are as published by the DWP and The Pensions Regulator.
Disclaimer: This article is general information about UK auto-enrolment qualifying earnings. It is not personal financial or payroll advice. The right contribution basis and the right amount for any individual or employer depend on the workforce composition, pay structure, scheme rules, and broader pension planning objectives. The Pensions Regulator's free guidance and a regulated pension consultant or payroll adviser can confirm the position for a specific employer.
Frequently asked questions
What are qualifying earnings in the UK?
Qualifying earnings are the band of earnings used to calculate auto-enrolment pension contributions, defined in section 13 of the Pensions Act 2008. For 2025-26 the band is 6,240 to 50,270 pounds. The pensionable income types within the band are salary, wages, commission, bonuses, overtime, and statutory sick / maternity / paternity / adoption / shared parental pay.
How much pension do I have to contribute under auto-enrolment?
The minimum total is 8 percent of qualifying earnings, split as 3 percent employer, 4 percent employee (after tax relief), and 1 percent tax relief from HMRC. The 8 percent applies only to the band; earnings below 6,240 pounds and above 50,270 pounds are not in qualifying earnings (unless the employer uses an alternative certification basis).
What is the difference between qualifying earnings and pensionable salary?
Qualifying earnings is the statutory minimum band (6,240 to 50,270 pounds in 2025-26). Pensionable salary is whatever the individual employer's scheme rules say the contribution percentage applies to - often defined more broadly (basic pay, basic pay plus bonus, total pay) and starting from zero rather than 6,240 pounds. Many employer schemes use a more generous pensionable salary definition.
Is the auto-enrolment lower limit being abolished?
The Pensions (Extension of Automatic Enrolment) Act 2023 gives the Secretary of State power to remove the lower limit on qualifying earnings and lower the age threshold to 18. The changes will take effect when a commencement order is made. The exact date is not yet confirmed.
Do bonuses count as qualifying earnings?
Yes. Section 13 of the Pensions Act 2008 lists bonuses as a component of qualifying earnings. So do commission, overtime, statutory sick pay, and statutory family-related pay (maternity, paternity, adoption, shared parental). The bonus or commission counts only in the pay period when it is paid.
