Automatic enrolment is the government's way of helping more people save for retirement. It is the process of assessing your staff and automatically putting eligible workers into an employer-provided pension scheme.
It is a legal duty where the rules apply, even if an employee says they do not want to be in a pension. This guide explains the main steps in plain English.
When should I write to my staff?
You must write to each member of staff to explain how automatic enrolment applies to them. This includes writing when they start work and, where relevant, when you postpone assessment, enrol them or re-enrol them.
You normally have 6 weeks from the relevant date to send the correct information. The Pensions Regulator provides letter templates for employers.
How do I assess my workforce?
You assess each worker's age and qualifying earnings for the relevant pay period. For 2026–27, the annual figures are £6,240 for the lower level of qualifying earnings and £10,000 for the automatic enrolment trigger. These figures are adjusted for the worker's pay frequency, so the monthly trigger is £833.
Workers fall into three main categories.
Entitled worker
An entitled worker is aged between 16 and 74 and earns £6,240 a year or less. They can ask to join a pension scheme, but it does not have to be an automatic-enrolment qualifying scheme and the employer does not have to contribute.
Non-eligible jobholder
A non-eligible jobholder is usually either:
- Aged between 16 and 74 and earning more than £6,240 but no more than £10,000 a year.
- Aged between 16 and 21, or between State Pension age and 74, and earning more than £10,000 a year.
They can opt in to a qualifying pension scheme. If they do, the employer must also contribute.
Eligible jobholder
An eligible jobholder is aged between 22 and State Pension age and earns more than £10,000 a year. They must be automatically enrolled into a qualifying pension scheme, and the employer must contribute.
Can enrolment be postponed?
You can postpone assessment for up to 3 months from certain dates, including when a worker starts or first becomes eligible. You must write to the worker within 6 weeks to tell them about the postponement and their right to opt in.
At the end of postponement, you must assess the worker and enrol them if they are eligible. A worker who gives a valid opt-in notice cannot simply be postponed instead.
How can a worker join or leave the scheme?
An entitled worker can ask to join a pension scheme by giving the employer a valid joining notice. They leave under the rules of that scheme.
Eligible and non-eligible jobholders can give a valid opt-in notice. The employer must then arrange active membership of a qualifying scheme and pay contributions where required.
Once enrolled, a worker can opt out during the one-month opt-out period by following the pension provider's process. Contributions are normally refunded after a valid opt-out. If the opt-out period has passed, the worker may be able to cease active membership, but contributions already paid are not normally refunded.
An employer must never force or encourage a worker to opt out or leave the pension scheme.
How do I choose a pension scheme?
If you need a qualifying pension scheme, you must take reasonable care when choosing one. Consider matters such as charges, how the scheme is run, investment options, payroll compatibility and the tax-relief method.
The Pensions Regulator lists pension scheme options and points to consider. If you need advice about investments or which scheme is suitable, speak to a regulated independent financial adviser.
How are contributions calculated?
The default method uses qualifying earnings. For 2026–27, these are earnings between £6,240 and £50,270 a year, adjusted for the pay period. Qualifying earnings include salary or wages, overtime, bonuses, commission and certain statutory payments.
The usual minimum total contribution is 8% of qualifying earnings, including at least 3% from the employer. The worker will normally provide the remaining 5%, including any tax relief.
For example, a worker earning £1,820 in a month has £1,300 of qualifying earnings after deducting the monthly lower level of £520. A 5% worker contribution is £65 and a 3% employer contribution is £39.
How does tax relief work?
The pension scheme decides which tax-relief method applies.
Relief at source
The worker's contribution is taken from net pay after tax. The pension provider then claims basic-rate tax relief from the government. For example, the worker pays £32 and the provider claims £8, making a £40 gross contribution.
This can help workers who do not earn enough to pay Income Tax because the provider can still add basic-rate relief. Higher-rate taxpayers may need to claim extra relief themselves.
Net pay arrangement
The contribution is taken before Income Tax is calculated, which gives tax relief through payroll. For a basic-rate taxpayer, a £40 gross contribution would usually reduce Income Tax by £8.
Workers who do not pay Income Tax do not receive tax relief through this method, although a government top-up may apply under the separate rules for low earners.
Salary sacrifice
The worker contractually gives up part of their salary and the employer pays that amount into the pension as an employer contribution. This can reduce Income Tax and National Insurance, but the arrangement has employment-law and benefit implications.
Salary sacrifice cannot reduce a worker's cash pay below the National Minimum Wage. The pension scheme must also support the arrangement.
Are there alternatives to qualifying earnings?
Yes. Some schemes calculate contributions using a different definition of pensionable pay. The employer must check the scheme meets one of the certification sets and normally re-certify at least every 18 months.
Set 1
- Contributions are calculated on basic pay from the first pound.
- Total contributions must be at least 9%, including at least 4% from the employer.
Set 2
- Contributions are calculated on pensionable pay from the first pound.
- Pensionable pay must be at least 85% of total earnings for the relevant workers.
- Total contributions must be at least 8%, including at least 3% from the employer.
Set 3
- Contributions are calculated on all earnings from the first pound.
- Total contributions must be at least 7%, including at least 3% from the employer.
When do I declare compliance?
You must tell The Pensions Regulator how you have met your duties. The online declaration is due within 5 months of your duties start date, which is normally the date your first member of staff starts work.
You can submit a declaration of compliance online. The employer remains legally responsible for making sure it is correct and submitted on time, even if someone else completes it.
What are the ongoing duties?
Automatic enrolment does not end after the first declaration. You must continue to:
- Write to staff when required.
- Assess staff each pay period.
- Enrol workers who become eligible.
- Calculate and pay contributions on time.
- Keep the required records.
- Complete re-enrolment and re-declaration duties every 3 years.
Need help with automatic enrolment?
There are several dates, earnings checks and communications to manage. If you would like help meeting your duties, contact us or use our Auto Enrolment Helper to assess workers and calculate contributions.