Workplace pensions: what auto-enrolment asks of every employer, from the first hire
Every employer must enrol eligible staff into a pension and pay in at least 3% of qualifying earnings. The rules, the numbers, and the duties that are easy to forget.
Auto-enrolment applies from your first employee. Staff aged between 22 and State Pension age who earn at least £10,000 a year, or £833 a month, must be put into a qualifying workplace pension automatically. Others can ask to join, and some of them must receive employer contributions if they do.
Qualifying earnings are pay between £6,240 and £50,270 a year in most schemes.
Show the data
| Employer | 3% |
|---|---|
| Employee, with tax relief | 5% |
| Total | 8% |
The duties beyond the first enrolment
- Write to staff about the pension within six weeks of their start or eligibility.
- Process opt-outs within the time allowed, and refund contributions correctly.
- Re-enrol eligible staff who opted out, around every three years.
- Complete the declaration of compliance with The Pensions Regulator.
Making it work for you
Pension contributions through salary sacrifice can save both employer and employee National Insurance, as long as pay does not fall below the National Minimum Wage. For directors of small companies, employer contributions are often the most tax-efficient way to save.
This insight is general information, not advice for your circumstances. Talk to us before acting on it.