A workplace pension is a scheme which is set up by employers to provide employees with benefits when they reach retirement age. Every UK employer must put certain employees into a workplace pension and make contributions towards the pension. We will look at what you, as a small  business owner, needs to be aware of in terms of auto enrolment.

Video: What is auto enrolment and does it apply to my business?

The Pensions Regulator


Auto enrolment means that every UK employer must put certain employees into a workplace pension and make contributions towards the pension. The organisation that deals with auto enrolment is called The Pensions Regulator. Auto enrolment may apply to your business if you employ at least one person (aged between 22 and state pension age). The video below explains more. 

What should I do about auto enrolment?

Use the duties checker from the Pensions Regulator to decide if auto enrolment applies to you (you will need your PAYE reference number). Depending on the outcome, one of the actions below will need to be followed:

Does auto enrolment apply?Action required
NoComplete the online form to tell the Pensions Regulator that auto enrolment does not apply to your business.
NB. You will need to inform them if your circumstances change in the future.
YesSubmit your PAYE (Pay As You Earn) reference to the Pensions Regulator, you will then be told your 'staging date'.


What is a 'staging date'?

The 'staging date' is the date that auto enrolment duties come into force for your business.

You must have a workplace pension in place for current and future employees by the staging date and you must also communicate with each employee about how auto enrolment affects them.

How do I choose a workplace pension?

As an employer the choice of a workplace pension scheme will depend on a number of factors:

  1. What is the cost to you?
  2. Is the scheme compatible with the payroll software currently used?
  3. Is the scheme suitable for all your current staff?
  4. Will the scheme be suitable for any future staff?
  5. Will the scheme carry out the administrative functions, you, as an employer require?

Workplace pension schemes are run by large, specialist providers and used by many employers.

Further details can be found on The Pension Regulator's website.

How much do I need to pay into a pension?

The amount paid into a pension scheme will be determined by the rules of the particular scheme. However, there are statutory minimum contributions, which are gradually being increased over time:

 Employer minimum contribution (%)Total minimum contribution (employee and employer) (%)
To 30 September 20171%2%
1 October 2017 to 30 September 20182%5%
1 October 2018 onwards3%8%


How does a workplace pension affect the payroll?

Employee’s workplace pension contributions are deducted from gross pay, before any income tax in calculated.

What information do I need to give to employees?

For every pay period employees must be supplied with a record of pay (either paper or electronically). This should show the gross pay, employee’s national insurance contributions, income tax, other deductions (including pension contributions), net pay and how the net pay is paid.

Next Steps

Visit The Pension Regulator's website to read more on auto enrolment

The Pensions Regulator is the UK regulator of work-based pension schemes. Whether you're a hairdresser, an architect or employ a personal care assistant, if you employ at least one person you are an employer and you have certain legal duties. 

Read more

Choose a pension scheme

You’ll need to have a pension scheme that is set up for automatic enrolment. Unless you want to use an existing pension scheme for automatic enrolment, you’ll need to find a scheme yourself or get help from your accountant or a financial adviser.

Read more

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