Auto enrolment laws give you some flexibility and discretion when deciding how to operate a workplace pension. Qualifying Earnings are the regulatory minimum and are based on earnings between the Lower Earnings Limit and stop at the Upper Earnings Limit.
However, you can also define pensionable salary to be Basic Salary or Total Earnings. The difference between each is shown below:
| Pay elements that must be included | * Qualifying Earnings | Basic Salary | Total Earnings |
| Earnings before deductions (salary/wages) | YES | YES | YES |
| Holiday pay | YES | YES | YES |
| Statutory benefits such as: maternity, paternity, adoption and sick pay delivered through the payroll | YES | YES | YES |
| Bonuses | YES | OPTIONAL | YES |
| Overtime | YES | OPTIONAL | YES |
| Commission | YES | OPTIONAL | YES |
*Qualifying Earnings start from the Lower Earnings Limit and stop at the Upper Earnings Limit (£520 to £4,189 a month in 2022/23)
The definition of pensionable salary will dictate the minimum contribution rates that must be made:
| Pensionable Salary Definition | Employer Minimum | Total Minimum | Shortfall |
| Qualifying Earnings (minimum requirement) | 3% | 8% | 5% |
| At least Basic Salary (known as 'Set 1') | 4% | 9% | 5% |
| At least Basic Salary, which is 85% or more of ^Total Earnings (known as 'Set 2') | 3% | 8% | 5% |
| Total Earnings (known as 'Set 3') | 3% | 7% | 4% |
Notes:
- The percentage shown are the minimums and the employers can choose a structure requiring more to be paid
- Employees are required to contribute at least the shortfall between the employer's chosen percentage and the Total Minimum percentage
- ^ Set 2 is only available is pensionable earnings are at least 85% of the aggregated total earnings, calculated as a group of employees