Pensionable pay

What you deduct contributions from

This page explains the types of pay you must deduct pension contributions from. It is a summary only. You must check the LGPS regulations for the full list.

https://www.lgpsmember.org/more/penpay.php

Pensionable pay from April 2014

You must deduct pension contributions from:

• Normal salary or wages.
• Bonuses.
• Fees
• Overtime, including contractual and non-contractual overtime.
• Pay for additional hours if a member works part time.
• Shift allowance.
• Maternity, paternity, adoption, and shared parental leave.
• Any benefits that the employee's contract confirms are pensionable.

You must not deduct pension contributions from:

• Pay that is not assessed for income tax.
• Travel, subsistence, or other expenses.
• Pay in lieu of leave.
• Pay in lieu of notice.
• Any award of compensation made for the purpose of achieving equal pay, other than a payment representing arrears of pay. 
• Payments for loss of future pensionable pay or benefits.
• An inducement not to leave employment.
• Pay paid by an employer whilst on reserve forces leave. 
• An inducement to terminate a contract. 
• Car allowance.

Employees' contributions

Employee contributions are a percentage of pensionable pay. The percentage is based on:

• Actual pensionable pay, or 
• Assumed pensionable pay (APP) or lost pensionable pay (LPP) for some types of absence,

When an employee joins the LGPS, you must decide the contribution rate they will pay. You must use a consistent and fair method, as you may not know the employee's full earnings at that point. You must review each employee's contribution band every April. You can review contribution bands more often if you choose. 

Important information for Councillors

This information does not apply to councillors who are able to join the LGPS from 11 May 2026. Different rules apply to councillor membership and pensionable pay.