- If you employ at least one member of staff, you have auto-enrolment duties from the day they start work, and completing a declaration of compliance is a legal requirement even when nobody has to be enrolled.
- You must assess staff every pay period, enrol anyone aged 22 to State Pension age earning over £10,000, and pay a minimum of 3% of their qualifying earnings toward an 8% total.
- Auto-enrolment repeats: you must re-enrol eligible staff who opted out roughly every three years and submit a re-declaration, and The Pensions Regulator can fine employers who miss these duties.
If you employ at least one person who is aged 22 to State Pension age and earns over £10,000 a year, you have to enrol them into a workplace pension with pension duties handled and pay into it. Those duties start from the day that person begins work, not from the day you get round to setting things up. Auto-enrolment is a legal requirement for every UK employer, of any size, and The Pensions Regulator can fine you for getting it wrong.
You don’t get a grace period, and there’s no size below which the rules stop applying.
That’s the part most small employers miss. Auto-enrolment isn’t a one-off task you tick off when you take on your first hire. It’s an assessment you repeat every pay period, with a declaration to file and a cycle that comes back round every three years.
Do you have auto-enrolment duties?
You have auto-enrolment duties the moment you employ someone who meets the criteria. There’s no threshold of staff numbers to cross first. One eligible employee is enough to make you an employer with legal duties.
The trigger is the person’s start date, so the duty applies from three things happening at once:
- You employ at least one member of staff.
- That person is aged 22 to State Pension age.
- They earn over £10,000 a year.
Pension contributions are part of the true cost of employing someone alongside salary and employer National Insurance, so it’s worth building the 3% employer minimum into your numbers from the start. If you’re a sole trader taking on your first hire, the same duty applies to you the moment a sole trader has employees.
What if you’re a company with only directors?
This is the single most common question, and the answer turns on employment contracts. A company with only directors, and no one else, may have no auto-enrolment duties at all, but only in specific circumstances.
You have no duties if either of these is true:
- Your organisation has only directors and none of them has a contract of employment.
- There’s a single director with a contract of employment and no other staff.
In those cases you aren’t an employer for auto-enrolment purposes, and you don’t need to complete a declaration of compliance. If The Pensions Regulator writes to you, you simply tell them you’re not an employer.
Duties do apply once a second person has a contract. If at least two directors hold employment contracts, or one director has a contract and there’s another member of staff, you’re an employer.
There’s an important catch, too. If you’re an employer because you have other staff but none of them meets the age and earnings criteria, you still have to complete a declaration of compliance. Being an employer with nobody to enrol is not the same as having no duties.
How do you work out which staff to enrol?
You assess every member of staff against two things: their age and their earnings. That assessment sorts them into three groups, and each group is treated differently.
| Group | Age and earnings | Your duty |
|---|---|---|
| Eligible jobholder | Aged 22 to State Pension age, earns over £10,000/year | Enrol automatically and contribute |
| Non-eligible jobholder | Aged 16 to 74, earns £6,240 to £10,000, or aged 16 to 21 or SPA to 74 earning over £10,000 | Enrol if they opt in, then contribute |
| Entitled worker | Aged 16 to 74, earns £6,240 or less | Give access to a scheme if they ask; no duty to contribute |
The £10,000 earnings trigger, and the qualifying earnings band of £6,240 to £50,270, are frozen at their current levels for the 2026/27 tax year.
Because earnings can change from one month to the next, this isn’t a one-time sort. You reassess every pay period, which is why the ongoing duty matters as much as the first enrolment. If you run payroll in a limited company, that reassessment should happen automatically through your payroll rather than depending on someone remembering.
How do you choose a qualifying pension scheme?
Not every pension scheme can be used for auto-enrolment. The scheme has to be a qualifying one, which broadly means it meets minimum standards on contributions and doesn’t make staff do anything to join or to keep their money building up.
Beyond that legal test, the practical questions are the ones that save you time:
- Does the scheme integrate with your payroll so contributions flow through automatically?
- What does it cost, for you and for your staff?
- How easy is it to enrol someone and to manage opt-outs?
We can’t recommend a specific provider, and you should be wary of anyone who leads with one before understanding your payroll. The right scheme is the one that fits how you run payroll, not the one with the loudest marketing.
How much do you have to contribute?
The minimum total contribution is 8% of an employee’s qualifying earnings. That 8% splits into a minimum you must pay and a balance the employee covers:
| Who pays | Minimum share |
|---|---|
| Employer (you) | At least 3% |
| Employee | 5%, including 1% tax relief |
| Total | 8% of qualifying earnings |
Qualifying earnings are the slice of pay between £6,240 and £50,270 a year, so contributions are calculated on that band, not on the whole salary. For someone earning £30,000, the contributions are worked out on £23,760, not the full £30,000, unless your scheme is more generous.
You can always pay more than the 3% minimum, and many employers do. What you can’t do is pay less; the 3% employer floor is a legal minimum, and paying below it is a breach.
When you’re modelling the real cost of a hire, pension sits on top of employer National Insurance, and depending on your headcount you may be able to reduce that NI bill through the employment allowance.
How do you enrol staff, and can you postpone?
Once you’ve identified an eligible jobholder, you enrol them and set up contributions through payroll. In practice, enrolment runs through your payroll software or your payroll provider, which assesses each person and reports contributions each pay run.
You can delay assessment for up to three months using postponement. Employers often use it to line pension duties up with a probation period or to smooth out a fluctuating first month’s pay.
Postponement doesn’t remove the duty; it moves the assessment date. You still have to write to staff to tell them you’re postponing, and anyone who asks to join during the postponement window has to be enrolled.
When someone becomes eligible partway through their time with you, through a pay rise or a birthday, you have a six-week window to act.
What do you have to tell your employees?
You have to write to each member of staff about how auto-enrolment affects them, and there are deadlines for doing it. The communication tells them they’ve been enrolled, or why they haven’t, what’s going into their pension, and their right to opt out.
That right to opt out is central. Anyone you enrol can choose to leave, and if they opt out within one month of being enrolled, they get back everything that’s been deducted. It’s a full refund, and the contributions are treated as though they never happened.
The letters aren’t optional box-ticking. Failing to communicate correctly is itself a breach, so it needs to be built into your enrolment process rather than bolted on afterwards.
What happens when staff opt out or opt back in?
An employee who opts out within the one-month window gets a full refund of their contributions, and the enrolment is unwound. If they opt out later than that, the money already deducted stays invested in their pension and can’t be refunded; they just stop future contributions.
Opting out isn’t permanent. Staff can ask to opt back in later, and non-eligible jobholders can ask to opt in even though they were never enrolled automatically. Once someone opts in, you can’t refuse to enrol them.
There’s one rule here you cannot get wrong. You must not do anything to encourage or induce staff to opt out. Offering a bonus, a pay bump, or any incentive to leave the pension is prohibited conduct, and The Pensions Regulator treats it seriously.
What is the declaration of compliance?
The declaration of compliance is how you tell The Pensions Regulator you’ve met your duties. It’s an online form covering who was in your employment when your duties started and what you did about each of them. It is not optional, and it is not something your payroll provider can be assumed to have handled unless you’ve confirmed it.
The deadline is five calendar months from the date your duties started, which is the date you employed your first member of staff. Miss it and you can be fined, even if you enrolled everyone correctly, because the declaration itself is the legal duty. Your duties aren’t complete until it’s submitted, so treat the deadline as seriously as the enrolment itself.
What are your ongoing duties every pay period?
Auto-enrolment doesn’t stop once the first declaration is in. Every pay period, you reassess your staff, because someone who wasn’t eligible last month may cross the earnings trigger or turn 22 this month. When they do, you enrol them and the six-week clock starts.
You also have to keep records, generally for six years: who you assessed, what you enrolled them into, the contributions you paid, and the communications you sent. If The Pensions Regulator ever checks, those records are what protect you.
This is the part that quietly catches people out, because it never announces itself. That’s exactly why it belongs inside a payroll process rather than in someone’s memory. If you’d rather not carry it, our accounting and payroll service keeps the assessment and records running in the background.
What is re-enrolment, and why do people forget it?
Roughly every three years, you have to put eligible staff who opted out back into the pension scheme. This is re-enrolment, and it’s the duty small employers miss most often, because three years is long enough to forget it exists.
You choose a re-enrolment date around the third anniversary of your original duties start date, assess your staff again, and re-enrol anyone who’s eligible but not currently in the scheme, including people who opted out. Those staff can opt out again, but you have to put them back in first.
Re-enrolment comes with its own paperwork: a re-declaration of compliance, due within five months of the third anniversary of your duties start date. Like the first declaration, it’s a legal duty in its own right, and missing it can lead to a fine even if you had no one to re-enrol.
What happens if you don’t comply?
The Pensions Regulator has a graduated enforcement route, and it starts with a nudge rather than a fine. If you’re behind, you’ll usually get a compliance notice first, setting a deadline to put things right. Ignore that and the penalties climb quickly:
- Compliance notice: a deadline to put things right, no fine yet.
- Fixed penalty notice: £400, the same for every employer regardless of size.
- Escalating penalty notice: £50 to £10,000 a day depending on your headcount, growing until you comply.
- Civil penalty for unpaid contributions: up to £5,000 for an individual and up to £50,000 for an organisation.
There’s one more cost that catches employers off guard. If you comply late, you’re expected to backdate contributions to the day each employee first became eligible, which can mean paying months of missed employer contributions in one go.
If you already know you’ve missed a duty, the honest move is to contact The Pensions Regulator and put it right. Voluntary correction is treated very differently from a breach they have to chase, and you can find more payroll guides if you want to get the wider process right first.
What does your auto-enrolment calendar look like?
Here’s the shape of the duty across time, from your first hire onward:
| When | What you have to do |
|---|---|
| Employee’s first day | Duties start; assess the new member of staff |
| Within 6 weeks of eligibility | Enrol eligible jobholders and start contributions |
| During enrolment | Write to staff about enrolment and their right to opt out |
| Within 1 month of enrolment | Process any opt-outs with a full refund of contributions |
| Within 5 months of duties starting | Submit your declaration of compliance |
| Every pay period | Reassess staff and enrol anyone newly eligible |
| Ongoing | Keep records for around six years |
| Around every 3 years | Re-enrol eligible staff who opted out |
| Within 5 months of the 3-year anniversary | Submit your re-declaration of compliance |
None of these dates move to suit you, which is the argument for tracking them somewhere reliable rather than trusting they’ll come back to mind.
Sleek can handle your auto-enrolment inside your payroll
We assess your staff every pay period, handle enrolment, and keep your declaration and re-enrolment dates tracked, so the duties that catch employers out are simply built into your payroll run.
Our payroll runs on qualified in-house accountants supported by technology, not outsourced admin. Where a task is genuinely free to do yourself with The Pensions Regulator, we’ll tell you so. If you have wider questions about staff, pay and pensions, our payroll and pensions FAQs are a good place to start.
Ready to hand pension duties over?
We’ll assess your staff, run enrolment and keep every declaration and re-enrolment date on track inside your payroll.
Frequently Asked Questions
Do I have to enrol someone who already has a personal pension?
Yes. An employee having their own SIPP or personal pension doesn’t remove your duty to assess and enrol them if they’re an eligible jobholder. They can opt out of your workplace scheme afterwards if they’d rather keep paying into their own, but the enrolment and your employer contribution have to happen first.
Can I use salary sacrifice for auto-enrolment pension contributions?
Yes, and many employers do because it saves both sides National Insurance. The catch is that a salary sacrifice arrangement can’t take an employee’s pay below the National Minimum Wage, so it doesn’t work for lower earners, and it has to be genuinely voluntary with a signed agreement rather than a default you impose. Worth knowing too: from April 2029, NI relief on sacrificed pension contributions will be capped at £2,000 a year, so the saving on anything above that goes away.
How does pension tax relief actually reach the employee?
It depends on how your scheme collects contributions. Under “relief at source”, the provider claims 20% back from HMRC and adds it to the pot, so a 5% employee contribution is really 4% from pay plus 1% relief. Under “net pay”, the full contribution comes out before tax, so relief is given automatically and there’s nothing to claim, though very low earners can miss out.
Do I have to enrol agency workers or contractors?
Agency workers usually have to be assessed by whoever pays them, which is often the agency rather than you, so check the contract chain. Genuine self-employed contractors who invoice you aren’t workers for auto-enrolment and fall outside the duties, but be careful: if someone is treated as self-employed but works like an employee, they may still count.
How do I work out backdated contributions if I've enrolled someone late?
You calculate what the employer and employee contributions would have been from the day the person first became eligible, using their actual qualifying earnings for each pay period since. You have to pay the employer share in full, and while you can ask the employee for their portion, in practice many employers absorb it to avoid a large deduction from one payslip.
Can I switch pension providers after I've set up auto-enrolment?
Yes. You can change scheme provided the new one is also a qualifying scheme, and you move existing members across without a break in contributions. You don’t re-run enrolment or ask staff to re-join; it’s a bulk transfer, though you do have to tell affected staff what’s changing and by when.
What happens to auto-enrolment when an employee has two jobs?
Each employer assesses that employee independently against the £10,000 trigger on the earnings they pay. Someone earning £8,000 from you and £8,000 elsewhere isn’t automatically enrolled by either employer, because neither job crosses the trigger on its own, though they can ask to opt in with you and you’d then have to contribute.
