As a company, you have the discretion to decide whether bonuses are pensionable or non-pensionable. This choice impacts both your business and your employees. If it's your policy you can consult with the employee to find out which they'd prefer
Key Differences
Pensionable Bonus: Included in pension contribution calculations.
Non-Pensionable Bonus: Excluded from pension calculations.
Factors to Consider
Bonus Type: Regular bonuses might be more suitable as pensionable, while one-off rewards might be non-pensionable.
Company Policy: Align with your overall compensation strategy and maintain consistency.
Financial Impact:
Employees: Pensionable bonuses boost retirement savings but may reduce take-home pay.
Employers: Pensionable bonuses increase pension costs but can aid retention.
Best Practices
Clearly communicate the pensionable status of bonuses to employees.
Apply your policy consistently to avoid perceived unfairness.
Regularly review your bonus structure to ensure it meets company needs.
Remember, the decision between pensionable and non-pensionable bonuses is at the company's discretion. Consider seeking professional advice for complex bonus schemes or if employees have specific questions.