# Pension contributions

> Pension contributions are the payments an employer and employee each make into a retirement savings scheme, either by law or under an employment contract.

Pension contributions are the amounts paid into a retirement savings scheme on behalf of a worker. They come from two sources: the employer, who must pay a minimum share by law in many countries, and the employee, whose contributions are typically deducted from gross pay each month. Together these payments build up a pot the worker draws on in retirement. Contribution rules vary widely by country. The UK runs an auto-enrolment system that requires every employer to enter eligible staff into a workplace pension automatically. Other countries, such as Germany, operate a statutory social-insurance model where pension contributions are split equally between employer and employee up to an earnings ceiling. When you hire internationally through a global employment platform, the platform handles enrolment, calculates the correct split for each country, and remits contributions to the right scheme on time.

## How does auto-enrolment work in the UK?

UK employers must automatically enrol eligible workers into a qualifying workplace pension. The minimum is 3% from the employer and 5% from the employee, totalling 8% of qualifying earnings. Workers can opt out, but you must re-enrol them every three years.

## What counts as qualifying earnings in the UK?

For 2026/27, qualifying earnings run from £6,240 to £50,270 a year. Only the portion of pay within that band is used to calculate contributions. Workers earning under £10,000 a year are not automatically enrolled, though they can ask to join.

## Do pension rules differ when you hire across borders?

Yes, significantly. Germany splits statutory pension insurance equally between employer and employee. France uses a multi-tier system with separate ARRCO and AGIRC rates. The type of scheme, contribution percentages, and earnings ceilings all vary, so local compliance is essential.

## What happens to pension contributions when employment ends?

Contributions already paid in belong to the worker. Depending on the country and scheme rules, the pot may be preserved until retirement, transferred to a new employer's scheme, or paid out. Vesting rules, which govern when employer contributions become fully owned by the worker, differ by country and scheme.

## Key facts

- **UK employer minimum (auto-enrolment):** 3% of qualifying earnings (Source: The Pensions Regulator, verified 2026-06-24)
  Total minimum is 8%, with the employee contributing the remaining 5%. Applies on earnings between £6,240 and £50,270 for 2026/27.
- **Germany statutory pension insurance rate:** 18.6% total, split 9.3% employer / 9.3% employee (Source: PwC Worldwide Tax Summaries, Germany, verified 2026-06-24)
  Applies up to an annual earnings ceiling of EUR 101,400 in 2026.

## Frequently asked questions

### Can employees opt out of a workplace pension?

In the UK, yes. Workers can opt out within a month of being enrolled and receive a refund of any contributions made. You must re-enrol opt-outs every three years. Opt-out rules in other countries vary; some statutory schemes have no opt-out at all.

### Do employers have to contribute more than the legal minimum?

No, but many do. Offering above-minimum pension contributions is a common way to attract and retain staff, particularly in competitive sectors. Any enhanced employer contribution should be clearly stated in the employment contract.

### What is vesting, and why does it matter?

Vesting is the point at which employer contributions become permanently owned by the employee. Some schemes vest immediately; others use a schedule, so an employee who leaves early may forfeit part of what the employer paid in. Check the scheme rules for each country you hire in.

### How does a global employment platform handle multi-country pension contributions?

The platform acts as the employer in each country, so it registers with local pension authorities, applies the correct contribution rates and earnings bands, deducts from payroll, and remits to the right scheme on time. You see the employer cost in your invoices.

## Sources

- [Making contributions to your pension scheme](https://www.thepensionsregulator.gov.uk/en/employers/new-employers/im-an-employer-who-has-to-provide-a-pension/choose-a-pension-scheme/understanding-your-costs/making-contributions-to-your-pension-scheme), The Pensions Regulator (UK)
- [Earnings thresholds for automatic enrolment](https://www.thepensionsregulator.gov.uk/en/employers/new-employers/im-an-employer-who-has-to-provide-a-pension/declare-your-compliance/ongoing-duties-for-employers/earnings-thresholds), The Pensions Regulator (UK)
- [Germany: Individual, Other taxes](https://taxsummaries.pwc.com/germany/individual/other-taxes), PwC Worldwide Tax Summaries

_Last updated 2026-06-24. Reviewed by Teamed's in-house employment-law team. Source: https://www.teamed.global/glossary/pension-contributions_