Your auto-enrolment pension duties begin on the day your first employee starts work. Every UK employer has workplace pension duties. You must put eligible staff into a pension scheme and pay into it too. The Pensions Act 2008 set the rules. Small employers do not get an exemption.
One employee is enough to make you an employer. The duties are the same whether you have one member of staff or 500. You just have less admin.
This guide explains who you need to enrol and what you pay. It covers the deadlines, the penalties and the ongoing checks. It also shows the real yearly cost per employee.
Quick answer
You must enrol staff aged 22 to State Pension age. They also need to earn over £10,000 a year. The legal minimum total contribution is 8% of qualifying earnings. You pay at least 3% of that. You write to all staff within six weeks. You declare compliance within five months.
What are your auto-enrolment duties as a UK employer?
You must set up a workplace pension and enrol eligible staff. You pay at least 3% of their qualifying earnings into it. You write to every worker within six weeks of your duties start date. You then declare compliance to The Pensions Regulator within five months.
The Pensions Act 2008 created these duties. You count as an employer as soon as one person works for you. The usual test is simple. You deduct tax and National Insurance from someone’s wages.
Your duties start date is fixed. It is the day your first member of staff starts work. You cannot move that date. You can delay enrolment itself by up to three months. That is called postponement.
Six jobs sit under auto-enrolment:
- assess every worker on your payroll
- choose a pension scheme that qualifies
- enrol your eligible staff and start paying in
- write to all staff, including the ones you do not enrol
- declare compliance to The Pensions Regulator
- keep assessing, paying and re-enrolling after that
The last one trips employers up. Auto-enrolment is not a one-off setup job. It is part of payroll.
Who must you enrol in a workplace pension?
Three tests decide who you enrol. Your worker must be aged 22 to State Pension age. They must earn over £10,000 a year and normally work in the UK. If they meet all three tests, you must enrol them and pay contributions into the scheme.
GOV.UK lists the staff you must enrol and the earnings test in full. UK-based staff who travel abroad for work still count. Some workers fail one test. They still have rights, and they fall into two other groups.
| Worker type | Age | Yearly earnings | What you do |
|---|---|---|---|
| Eligible jobholder | 22 to State Pension age | Over £10,000 | Enrol them. Pay in. |
| Non-eligible jobholder | 16 to 21, or State Pension age to 74 | Over £10,000 | Enrol on request. Pay in. |
| Non-eligible jobholder | 16 to 74 | £6,240 to £10,000 | Enrol on request. Pay in. |
| Entitled worker | 16 to 74 | Under £6,240 | Enrol on request. No employer payment needed. |
A non-eligible jobholder can ask to join at any time. If they do, you pay employer contributions. An entitled worker can ask to join too, but you do not have to pay in for them.
You check ages and earnings on every pay run. A birthday can make someone eligible. So can a month of overtime. Then you have six weeks to enrol them and write to them.
What is the minimum employer pension contribution?
The legal minimum total contribution is 8% of qualifying earnings. You must pay at least 3% as the employer. The staff member pays the remaining 5%. You can pay more, and if you pay the full 8%, your staff pay nothing.
Qualifying earnings are a band, not the full salary. For the 2025/26 tax year, the band runs from £6,240 to £50,270 a year. In monthly terms, that is £520 to £4,189. The government reviews these figures every year.
The Pensions Regulator publishes the minimum contribution rates and the current band. Total pay counts, not just basic salary. Add commission, bonuses and overtime. Statutory sick pay also counts. Statutory maternity, paternity and adoption pay count too.
You send the money to the scheme by the 22nd of the following month. If you pay by cheque, you have until the 19th. Late payment can lead to a fine.
What does auto-enrolment cost you per employee?
You pay 3% of qualifying earnings, not 3% of salary. Take yearly pay, subtract £6,240, then cap it at £50,270. Your 3% applies to what is left. A £30,000 salary costs you £712.80 a year at the minimum rate.
Most employers overestimate this figure. Here is the calculation at the legal minimum:
| Yearly salary | Qualifying earnings | Your 3% | Staff 5% |
|---|---|---|---|
| £15,000 | £8,760 | £262.80 | £438.00 |
| £25,000 | £18,760 | £562.80 | £938.00 |
| £30,000 | £23,760 | £712.80 | £1,188.00 |
| £45,000 | £38,760 | £1,162.80 | £1,938.00 |
| £60,000 | £44,030 | £1,320.90 | £2,201.50 |
The £60,000 row stops at the cap. Pay above £50,270 carries no pension duty. That is why the cost flattens for senior salaries.
The pension is not your only cost per hire. You also pay employer National Insurance contributions on the same wages. Budget for both before you make an offer.
Some employers hand the whole job to a bureau. payroll support in the UK covers assessment, deductions and the pension file.
When must you set up auto-enrolment?
Your duties start the day your first employee starts work. You get six weeks to write to staff about the scheme. You can delay enrolment for up to three months. Your declaration of compliance is due within five months of that start date.
You register as an employer with HMRC before your first payday. Our guide to PAYE for UK employers covers that step. Auto-enrolment then sits on top of your payroll.
Postponement buys you three months, no more. It does not cancel the six-week letter. You still have to write to staff and tell them you are postponing. You cannot use postponement at re-enrolment.
The declaration of compliance trips up small employers. You have five months from your duties start date. You file it even if nobody needs enrolling. The Pensions Regulator can fine you if you miss it.
What must you tell your staff in writing?
You write to each member of staff individually within six weeks. The letter explains how automatic enrolment applies to that person. Staff you do not enrol get a letter too. The Pensions Regulator publishes free templates, so you do not need to draft the wording yourself.
There is a separate template for staff you are postponing. There is another for schemes that use a net pay arrangement. Those staff do not get tax relief in the usual way, so the wording changes.
TPR also publishes the letters in more than 20 languages. Bulgarian, Polish and Romanian versions are all there. That matters in hospitality, care and construction payrolls.
Your pension provider may send these letters for you. The legal duty still sits with you.
What happens if you get auto-enrolment wrong?
The Pensions Regulator starts with a compliance notice. Ignore it and you get a £400 fixed penalty. Ignore that and daily fines run from £50 to £10,000. You also backdate every missed contribution to the day the worker first qualified.
The backdated contributions hurt more than the fine. The Pensions Regulator's enforcement rules says you pay all unpaid employer contributions. Your staff member pays their share. As part of enforcement, TPR can make you pay the staff share too.
Two more traps sit outside the contribution rules.
You cannot screen job applicants on pensions. Asking an applicant whether they would opt out is prohibited recruitment conduct. So is a job advert hinting at it. The fine runs from £1,000 to £5,000, based on your staff numbers.
You also cannot push existing staff to opt out. TPR calls that an inducement. Offering a pay rise or a bonus for opting out breaks the rule.
Wilfully failing to enrol eligible staff is a criminal offence. So is knowingly filing a false declaration. The maximum punishment is two years in prison or a fine.
What are your ongoing auto-enrolment duties?
Auto-enrolment does not finish once your scheme goes live. You assess staff ages and earnings on every pay run. You pay contributions to the scheme by the 22nd of the next month. Every three years, you re-enrol staff who left and re-declare compliance.
Staff get one month to opt out after you enrol them. If they opt out within that window, you refund their contributions. You have one month to do the refund. If they leave later, the money stays invested until retirement.
You must keep records for six years. Opt-out records last four years. Keep names, National Insurance numbers, earnings, contributions and joining notices.
Your re-enrolment date is three years after your first employee started. After that, it repeats every three years. Some staff who left the scheme more than 12 months earlier go back in. You also put back staff paying below the minimum. Then you write to them within six weeks.
The re-declaration is separate. You file it every three years even if nobody goes back in. Miss it and the fines start again.
Auto-enrolment is a monthly payroll task, not a one-time setup. Miss one assessment and the backdating starts. DASA's outsourced payroll service covers the assessment, deductions and declaration. If you want current pricing, get a quote.
Figures checked against The Pensions Regulator and GOV.UK in August 2026. Thresholds change each tax year.
This article gives general information about auto-enrolment for UK employers. It is not financial, tax or legal advice. Every payroll is different. Written by Raqeeb Marzook, ACCA, Manager at DASA Accountancy. Speak to a qualified accountant about your own situation.
Frequently asked questions
What are employer auto-enrolment obligations in the UK?
You must set up a workplace pension, enrol eligible staff, pay at least 3% of their qualifying earnings, write to every worker within six weeks and declare compliance to The Pensions Regulator within five months of your duties start date.
What is the minimum employer pension contribution?
The minimum total contribution is 8% of qualifying earnings. The employer must pay at least 3%. The staff member pays the remaining 5%. Employers can pay more than 3%.
Who must be enrolled in a workplace pension?
Staff aged 22 to State Pension age who earn over £10,000 a year and normally work in the UK. Other workers can ask to join, and most of them get employer contributions.
What are qualifying earnings for auto-enrolment?
For the 2025/26 tax year, qualifying earnings are total pay between £6,240 and £50,270 a year. That includes salary, commission, bonuses, overtime and statutory sick, maternity, paternity and adoption pay.
What is the fine for failing auto-enrolment duties?
The Pensions Regulator issues a compliance notice first. A fixed penalty of £400 follows. Continued non-compliance brings a daily escalating penalty of £50 to £10,000, plus backdated contributions.