What Is Auto Enrolment? Employer Duties Explained

by | Nov 13, 2025 | Guidance

Auto enrolment is the legal requirement for employers to put eligible employees into a workplace pension and contribute to it.
Every employer in the UK must operate auto enrolment correctly — even if they only have one employee.

This guide explains what auto enrolment is, who it applies to, and what employers must do to stay compliant.

What Auto Enrolment Means

Auto enrolment ensures that employees save into a pension while working.
Under this system:

  • Employers must assess their workforce

  • Eligible employees must be automatically enrolled

  • Employers must make pension contributions

  • Employees can opt out if they choose

  • Contributions must be paid to a pension scheme

  • Records must be kept for compliance

Auto enrolment is monitored by The Pensions Regulator (TPR), and penalties apply for non-compliance.

Who Must Be Auto Enrolled?

Employers must automatically enrol eligible jobholders, who are:

  • Aged 22 to State Pension age

  • Earning above £10,000 per year (threshold may change annually)

  • Working in the UK

  • Classed as workers (not self-employed contractors)

Other worker types:

  • Non-eligible jobholders – can opt in and receive employer contributions

  • Entitled workers – can join the pension, but employers don’t have to contribute

Correct classification is essential.

Employer Duties Under Auto Enrolment

Employers must:

1. Assess employees every pay period

You must determine:

  • Worker type (eligible, non-eligible, entitled)

  • Earnings in that period

  • Age and location

  • Any changes affecting status

Assessment must happen every pay cycle, not just once a year.

2. Enrol eligible employees

Eligible employees must be enrolled automatically unless they opt out.

Employers must:

  • Provide statutory communications

  • Enrol workers promptly

  • Ensure correct contribution rates

3. Make pension contributions

The minimum contributions are currently:

  • Employer: 3%

  • Employee: 5%

  • Total: 8%

Higher contributions can be agreed through contractual or enhanced schemes.

4. Pay pension contributions on time

Employers must:

  • Deduct contributions from pay

  • Add employer contributions

  • Submit files to the pension provider

  • Pay the pension contribution amount by the provider’s deadline

Late payments can breach regulations and affect employees’ pensions.

5. Manage opt-outs and re-enrolment

Employees can opt out within a set period.
Every three years, employers must:

  • Reassess employees

  • Re-enrol those who meet eligibility

  • Complete a re-declaration of compliance

TPR audits this closely.

6. Keep accurate records

Employers must keep records for at least 6 years, including:

  • Assessment results

  • Contributions

  • Opt-ins and opt-outs

  • Pension communications

  • Scheme details

  • Payment confirmations

Failing to keep records can cause compliance issues.

Choosing a Pension Scheme

Employers must select a suitable workplace pension provider.
Popular choices include:

  • NEST

  • The People’s Pension

  • Smart Pension

  • Aviva

  • Legal & General

  • Royal London

The scheme must meet auto enrolment rules and integrate with payroll processes.

Auto Enrolment and Payroll

Payroll must:

  • Assess worker status each pay period

  • Calculate contributions

  • Apply correct qualifying earnings (or other basis)

  • Ensure salary sacrifice (if used) is applied correctly

  • Produce pension files for the provider

  • Show pension contributions on payslips

  • Include data in RTI submissions

Auto enrolment is closely linked to payroll compliance.

Common Auto Enrolment Mistakes

Typical issues include:

  • Incorrect worker classification

  • Missing or inaccurate assessments

  • Late or missing pension contributions

  • Contributions calculated incorrectly

  • Not re-enrolling employees every 3 years

  • Not completing the re-declaration

  • Wrong pensionable earnings basis

  • Salary sacrifice errors affecting contributions

  • Pension files not matching payroll data

These can lead to penalties from The Pensions Regulator.

How We Help Employers with Auto Enrolment

Your Payroll Team supports employers with:

  • Auto enrolment setup

  • Worker assessments

  • Contribution calculations

  • Pension file management

  • Re-enrolment every 3 years

  • Fixing historic errors

  • Compliance reviews

  • Salary sacrifice advice

  • Ongoing payroll support

Talk to a Payroll Specialist About Auto Enrolment

FAQ: Auto Enrolment

Do all employers have to operate auto enrolment?
Yes — even if you only employ one person.

Can employees opt out?
Yes, but employers must still enrol them first before opt-out.

Do directors need to be enrolled?
Often no — depending on payroll setup and whether they have employment contracts.

Do contributions need to be paid every pay period?
Yes — you must deduct and pay contributions promptly.