Does an employer pay pension contributions on redundancy pay and holiday pay in UK system?

Answer 1

You pay Company Pension contributions on your normal salary up to the final date of employment.

If you get pay-in-lieu of Notice (i.e. you did not work your Notice) then you pay Tax on that but not Pension.

If you worked your Notice, then you pay Pension on that.

Assuming you got pay-in-lieu (or worked you Notice), In you final Salary pay you should also get paid for Holidays you are entitled to but have not taken. That payment is also Taxable but you don't pay Pension out of it.

NOTE - I believe you may be asked to work your Notice BUT also to take off any Holidays you are entitled to ! In that case you would pay pension.

You don't pay Pension contributions on Redundancy pay.

Redundancy up to £30,000 is Tax free - any over that is Taxed as normal.

Answer 2

Pension contributions usually depend on the particular contractual arrangements between the employer and the employee. However, generally the positions is: on holiday pay, yes; on redundancy pay, no.

Answer 3

Redundancy pay doesn't come into it because by the time you get it you don't work for that particular employer any more, but holiday pay DOES because you get that regardless of redundancy.

Answer 4

holiday pay YES as you are still employed and it is your normal pay, redundancy pay, NO, as it isn't part of your normal pay package.