Automatic enrolment: the employer's guide
The duties in the order you actually meet them - work out who qualifies, enrol them, write to them, declare it, then keep the three-year cycle turning. Most of the penalties come from the paperwork, not the pension.
You must automatically enrol any worker aged 22 to State Pension age who earns at least £10,000 a year, and write to them within 6 weeks (gov.uk). The minimum contribution is 8% of qualifying earnings with at least 3% from you. After that it is a cycle: honour the one-month opt-out window, re-enrol every three years, re-declare compliance, and keep the records for six years.
Step 1 - work out who is who
Auto-enrolment is three duties, not one, and which one you owe depends on age and earnings. The pension contribution calculator will categorise a worker for you, but the shape is:
| Category | Who | What you owe them |
|---|---|---|
| Eligible jobholder | 22 to State Pension age, over £10,000 | Enrol them automatically, and contribute |
| Non-eligible jobholder | 16-21 or SPA-74 over £10,000; or 22-SPA earning £6,240-£10,000 | No duty to enrol - but if they opt in, you must contribute |
| Entitled worker | Earning £6,240 or less | They can join; you need not contribute |
This is assessed every pay period, not once at hire. A part-timer who picks up a month of overtime can cross the £10,000 trigger for that month and become eligible in it. Assessment that happens only when someone joins is the single most common way employers end up with a missed enrolment they did not know about.
Step 2 - enrol them, and write to them
When someone becomes eligible you must put them into a qualifying scheme and write to them within 6 weeks. The letter is not a formality: it is what tells them they have been enrolled, what is being deducted, and that they have a right to opt out. Getting the letter wrong or late is a compliance failure even where the pension itself is set up correctly.
Step 3 - the opt-out window
Staff have one month from joining to opt out without penalty. If they do, you must refund their contributions within one month of the request, and it is as if they were never a member. After the window closes they can still stop contributing, but what has already gone in stays in the pension until retirement.
The opt-out has to be the worker's own decision, made through the scheme rather than through you. Suggesting to staff that they could opt out - even helpfully, even to protect their take-home pay - is the fastest route to an enforcement problem. If someone asks, point them at the scheme and stay out of it.
Step 4 - declare compliance
Setting the scheme up is not the duty. Telling The Pensions Regulator you have done it is. The declaration of compliance is a separate filing with its own deadline, and it is where a surprising share of enforcement action starts - employers who did everything right and never filed.
Step 5 - the three-year cycle
- Re-enrol every three years - three years after your first member of staff started, then every three years. Staff who previously opted out and are still eligible go back in.
- Write to them within 6 weeks of the re-enrolment date, exactly as at first enrolment.
- File a re-declaration of compliance every time, even if nobody was actually re-enrolled. This catches people out: no re-enrolments does not mean no filing.
Step 6 - the records
Keep for six years: names, addresses, ages, earnings, contribution payment dates and the pension scheme reference number. Keep requests to leave the scheme for four years. These are the records that prove the duties were met, and they are what an inspection asks for first - so they need to survive a payroll provider change, which is the point at which they most often do not.
The money
The minimum is 8% of qualifying earnings - the pay between £6,240 and £50,270 - with the employer paying at least 3%. Because the band starts at £6,240, that 8% is charged on less than the full salary, so a £30,000 earner contributes on £23,760. You can certify an alternative basis on total or basic pay if you would rather the percentage meant what it appears to mean. Salary sacrifice changes the National Insurance rather than the pot: see the contribution calculator for both.
Where employers actually get caught
- Assessing at hire instead of every pay period, and missing a worker who crossed the trigger.
- Setting the scheme up correctly and never filing the declaration.
- Skipping the re-declaration because nobody needed re-enrolling.
- Losing the records in a payroll migration.
- Being helpful about opting out.
None of those is about pensions. All of them are about process, which is the argument for keeping enrolment status where the payroll data already lives rather than in a spreadsheet somebody maintains by hand.
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The records an inspection asks for first
CoDash keeps ages, earnings, start dates and documents per person with a full history - so the six years of evidence auto-enrolment expects is a by-product of running the company, not a separate spreadsheet.