Payroll
Auto enrolment: what every UK employer actually has to do
The moment you employ your first member of staff, auto enrolment duties begin — automatically, whether you know about them or not. It's one of the least-loved bits of being an employer, but the mechanics are manageable once you know the shape. Here it is without the jargon.
Who you have to enrol
Broadly: staff who are aged between 22 and State Pension age and earn above the earnings trigger (which has been frozen at £10,000 a year for several years) must be put into a workplace pension automatically. Staff outside that group can usually ask to join, and some of them you must contribute for if they do. Every employee must be assessed — including part-timers and seasonal staff, who trip employers up because earnings fluctuate around the trigger.
What it costs
The legal minimum contribution is 8% of qualifying earnings, of which you as the employer must pay at least 3% — the employee makes up the rest, helped by tax relief. Qualifying earnings are a band of pay, not the whole salary, so the true cost is lower than "8% of payroll" suggests. Plenty of employers pay above the minimum; in a tight hiring market it's one of the cheaper benefits to be generous with.
The duties nobody mentions
Enrolling people is the visible part. You must also: declare your compliance to The Pensions Regulator within five months of your duties starting (even if you had nobody to enrol); process opt-outs and refunds correctly — and never, ever encourage someone to opt out, which is unlawful; keep records; and run re-enrolment every three years, putting eligible opt-outs back in and re-declaring. The three-year cycle is the one that gets forgotten, and it comes with the same fines as ignoring the duties in the first place — fixed penalties, then escalating daily ones.
Director-only companies
If your company has no staff beyond directors without employment contracts, you're usually exempt — but you still need to tell The Pensions Regulator so, or they'll assume you're non-compliant. Two minutes online, commonly missed.
The realistic way to handle it
Auto enrolment lives inside payroll: assessment happens every pay run, contributions are calculated on live earnings, and letters have statutory wording and deadlines. Trying to bolt it on manually next to DIY payroll is where errors breed. When we run payroll for Leeds employers, the assessment, contributions, letters, declarations and re-enrolment all happen as part of the run — which is, honestly, how this was designed to work. If you're hiring your first employee and the pension side is the bit making you nervous, that's a ten-minute conversation.
This is general information, not advice for your circumstances. If you'd like it applied to your situation, get in touch — the first chat is free.
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