Pensions contributions are based on a “qualifying earnings basis”. Basically, the contribution is based on earnings between £6,240 per annum and £50,270 per annum.

Firstly, the minimum contribution applies to anything you earn over £6,240 up to a limit of £50,270 (in the tax year 2024-25). This includes overtime and bonus payments. You as the employee have to contribute 3%.

For example, if your gross salary was £30,000 per annum, your contribution would be a percentage of £23,760 (£30,000 – £6,240). In the example of making the minimum contribution, it would be 3% x £23,760 = £712.80.

You can increase this percentage as long as you still meet national minimum wage requirements.