Pensionable salary, or pensionable earnings, refers to the amount on which your employer will pay their percentage contribution to your pension. The pensionable salary is not always the same as your monthly payslip. Pensionable earnings include items such as bonuses, commission, honoraria, non-contractual overtime pay, statutory sick pay and statutory maternity pay. Non-pensionable earnings include expenses, travel money, car allowances and pay-in-lieu of notice.

The gross earnings amount on which contributions are calculated is known as “qualifying earnings”. Employers may calculate their employee contributions either based on qualifying earnings, or on “banded earnings”: that amount of pay after salary thresholds have been applied.