Workplace Pensions: Automatic Enrolment & Declarations
Taking on an employee is an exciting step for any business. You've registered as an employer, set up payroll, agreed their salary and started paying them. Everything's sorted! Or is it?
There's another responsibility that comes with employing people and it's one that small businesses can easily overlook. Workplace pensions and automatic enrolment. Before you think, “My employees don't earn enough for a pension, so this doesn't apply to me,” there's something important you need to know. Even if none of your employees qualify for automatic enrolment, you may still have legal responsibilities to The Pensions Regulator. These include assessing your employees, providing the appropriate information and submitting a declaration of compliance.
The responsibilities also don't necessarily end once you've completed that first declaration. Let's explain how automatic enrolment works, what employers need to do and why those pension declarations are more important than you might think.
What is automatic enrolment?
Automatic enrolment is a legal requirement designed to help people save for retirement. Under the rules, employers must assess their workers and automatically enrol those who meet certain criteria into a qualifying workplace pension scheme. Both the employer and employee will usually contribute to the pension, helping the employee build retirement savings alongside any State Pension entitlement.
The system is overseen by The Pensions Regulator, often referred to as TPR and it applies to businesses of all sizes. You don't need to employ 50 people or have a dedicated HR department.
Even a business taking on its first employee can have automatic enrolment responsibilities.
Who needs to be automatically enrolled?
Not every employee needs to be automatically enrolled. Whether someone qualifies depends on their age, earnings and working arrangements. For the 2026/27 tax year, an employee will generally need to be automatically enrolled if they:
Are aged between 22 and State Pension age.
Ordinarily work in the UK.
Earn more than £10,000 a year, or the equivalent threshold for their pay period.
For monthly payroll, the automatic enrolment earnings trigger is £833 per month. These thresholds are reviewed periodically, so employers need to make sure they're using the correct figures.
What about employees who don't qualify?
This is where things become slightly more complicated. Employees who don't meet the automatic enrolment criteria may still have rights to join a workplace pension scheme. For example, someone aged 20 earning £18,000 a year wouldn't normally need to be automatically enrolled because of their age. However, they can ask to join a qualifying workplace pension scheme and the employer may be required to contribute. Other employees may have the right to join a pension scheme without being entitled to employer contributions. The distinction depends on their age and earnings.
The important point is that not qualifying for automatic enrolment doesn't necessarily mean an employee has no pension rights and it certainly doesn't mean the employer can simply forget about workplace pensions.
How much needs to be paid into the pension?
Under the standard qualifying earnings calculation, the minimum total pension contribution is generally 8%, of which at least 3% must come from the employer. The remainder is normally funded through employee contributions, taking account of any applicable tax relief.
Here's something that often causes confusion. Those percentages aren't necessarily calculated on the employee's entire salary. Under the standard qualifying earnings method, contributions are calculated on earnings between specified thresholds. For 2026/27, those annual thresholds are:
Threshold | Amount |
Lower qualifying earnings threshold | £6,240 |
Upper qualifying earnings threshold | £50,270 |
Let's look at an example
Imagine an employee earns £25,000 a year.
Using the standard qualifying earnings method:
Calculation | Amount |
Annual salary | £25,000 |
Less lower qualifying earnings threshold | £6,240 |
Qualifying earnings | £18,760 |
Minimum employer contribution at 3% | £562.80 |
Minimum total contribution at 8% | £1,500.80 |
In this simplified example, the employer would contribute at least £562.80 over the year. The total minimum pension contribution would be £1,500.80. Different pension schemes can use different qualifying contribution arrangements, including calculations based on pensionable pay rather than qualifying earnings. It's important to understand how your particular scheme operates.
When do automatic enrolment duties begin?
For a new employer, automatic enrolment duties generally begin when the first member of staff starts work. This is known as the duties start date. You don't wait until you've been employing somebody for six months and you don't wait until you have enough employees to make setting up a pension scheme worthwhile.
From the outset, employers need to assess their staff and determine what pension duties apply. That may involve selecting a suitable pension scheme, automatically enrolling eligible employees and providing the appropriate written information. There are provisions allowing employers to postpone automatic enrolment for up to three months in certain circumstances, but postponement has its own requirements and doesn't remove the employer's wider responsibilities. Even when nobody qualifies for automatic enrolment, there may still be something important to complete.
What is a pension declaration of compliance?
This is the part I particularly want employers to understand. A declaration of compliance is an online submission made to The Pensions Regulator. It tells the regulator how your business has met its automatic enrolment duties. It isn't a pension contribution. It isn't a payroll report and it isn't something that automatically happens simply because you've registered with a pension provider. It's a separate legal requirement.
The declaration provides information about the employer, the pension arrangements and the workforce. Here's the crucial point; Employers who have automatic enrolment duties must complete a declaration of compliance even if they haven't needed to automatically enrol any employees.
Let's imagine you employ two part-time members of staff. Neither earns enough to trigger automatic enrolment. You assess them, establish their pension rights and provide the appropriate information. You might not need to automatically enrol either employee but you still have automatic enrolment duties as an employer. That means you still need to submit your declaration of compliance. No eligible employees doesn't automatically mean no declaration.
When is the declaration of compliance due?
The deadline for a new employer is five calendar months after their duties start date.
Let's use an example.
Your business takes on its first employee on 1 January 2027.
That becomes your duties start date, assuming automatic enrolment duties apply.
You must complete your declaration of compliance within five calendar months.
In this example, your deadline would be 31 May 2027.
That might sound like plenty of time but it's surprisingly easy for the deadline to be overlooked when you're concentrating on running the business. Missing it can have consequences. The Pensions Regulator has enforcement powers and can issue penalties where employers fail to meet their legal obligations. So this isn't simply an optional administrative form.
How do you submit a declaration of compliance?
Declarations are completed online through The Pensions Regulator's website. You'll need information about your business and its pension arrangements. This can include:
Your employer PAYE reference.
Your letter code from The Pensions Regulator or other accepted reference.
Employer contact information.
Details of your workplace pension scheme, where applicable.
Information about your employees and how you've met your automatic enrolment duties.
The Pensions Regulator provides a checklist explaining what information you'll need. Once the necessary information is available, the declaration itself can be relatively straightforward but don't confuse straightforward with unimportant. A task that takes a relatively short time to complete can still carry a legal deadline and once you've submitted the declaration, keep confirmation that it has been completed.
You can find the online process and guidance at: https://www.thepensionsregulator.gov.uk
What happens after the first declaration?
This is another area where employers can get caught out. Completing your initial declaration doesn't mean you've finished dealing with automatic enrolment forever. Workplace pensions involve ongoing responsibilities. You need to continue assessing relevant employees as their circumstances change.
For example:
An employee reaches age 22.
Someone's earnings increase above the automatic enrolment threshold.
A new employee joins the business.
An employee asks to join a pension scheme.
Someone opts out of their pension.
Pension contributions need updating or processing.
Employers must also maintain appropriate records, provide required communications and ensure pension contributions are paid correctly and on time.
Then there's another important responsibility... Re-enrolment.
What is pension re-enrolment?
Every three years, employers must carry out a re-enrolment exercise. This involves assessing certain employees who previously opted out of, or stopped contributing to, a workplace pension scheme.
If they meet the relevant criteria, they may need to be automatically re-enrolled. There are exceptions, so it isn't necessarily a case of putting every employee who has ever opted out straight back into the scheme but the assessment needs to be carried out correctly.
The employer can generally choose a re-enrolment date within the permitted six-month window around the relevant three-year anniversary. Then there's another declaration to complete.
What is a re-declaration of compliance?
A re-declaration of compliance tells The Pensions Regulator how the employer has met its three-year re-enrolment duties. It is a separate submission from the original declaration and yes, it needs completing even if there are no employees to re-enrol. For a first re-declaration, the deadline is normally five calendar months after the third anniversary of the original duties start date. Subsequent re-declarations follow the relevant three-year cycle.
Here's an example
Imagine your automatic enrolment duties began on 1 June 2024. You completed your original declaration of compliance within the required five-month period. Three years later, your business reaches its re-enrolment cycle. The third anniversary of your duties start date is 1 June 2027. Your first re-declaration deadline would be 31 October 2027. Even if nobody needs putting back into the pension scheme, the re-declaration still needs submitting and the deadline isn't extended simply because you selected a different date within the permitted re-enrolment window. The re-declaration is an ongoing legal requirement, not something you only complete when an employee actually re-joins a pension scheme.
What about companies with only directors?
Now for an important exception. Not every limited company automatically has workplace pension duties. For example, if you're the sole director of a limited company and don't employ anybody else, the company generally won't have automatic enrolment duties. This applies even where the sole director is paid through payroll.
For companies with multiple directors and no other staff, the position depends on whether the directors have contracts of employment. If none of the directors has an employment contract, or only one does, the company will generally fall outside automatic enrolment duties. Where at least two directors have employment contracts, duties can apply, although there are specific rules concerning the automatic enrolment of directors. If your company genuinely has no automatic enrolment duties and you've received a letter from The Pensions Regulator, you should use the appropriate process to tell them you're not an employer for automatic enrolment purposes. This is different from submitting a declaration of compliance. But be careful... A company employing staff who simply don't earn enough to be automatically enrolled is not the same as a company that has no automatic enrolment duties at all. If a director-only company subsequently takes on an employee, its position can change.
Five common automatic enrolment mistakes
There are a few misconceptions worth clearing up.
1. “Nobody earns enough for a pension, so I don't need to do anything.”
Not necessarily. You may still need to assess employees, explain their rights and complete a declaration of compliance.
2. “I've set up a pension scheme, so everything's sorted.”
Setting up a scheme is only part of the process. You also need to meet your enrolment, communication, contribution and declaration obligations.
3. “My payroll software calculates pensions automatically.”
That's helpful, but it doesn't necessarily mean every automatic enrolment responsibility has been completed. Payroll calculations and declarations to The Pensions Regulator are different processes.
4. “We completed our declaration when we first employed someone.”
Excellent. Wat about your three-year re-enrolment and re-declaration responsibilities? They don't disappear simply because you've completed the original paperwork.
5. “Nobody needs re-enrolling, so there's no re-declaration.”
Unfortunately, that's not how it works. Employers with re-enrolment duties still need to complete their re-declaration, even where there are no employees to put back into the scheme.
Why is keeping track of pension responsibilities so important?
For a small business, automatic enrolment can feel like another layer of administration. You've already got payroll, PAYE, National Insurance, holiday pay and all the other responsibilities that come with employing people. Now there are pension assessments, contribution calculations, employee communications and declarations to consider. It helps employees build retirement savings, with employers contributing towards that future and from a business perspective, understanding your responsibilities helps you avoid missed deadlines, incorrect contributions and unnecessary compliance problems.
The easiest approach is to treat automatic enrolment as an ongoing part of employing staff. Not something to think about only when you first set up payroll and not something to revisit only when The Pensions Regulator sends a reminder. It's also definitely not something to assume has been completed simply because pension deductions appear on payslips.
Don't forget the declaration
If there's one message I'd like employers to take away from this blog, it's this:
Automatic enrolment isn't just about paying pension contributions. It's about assessing employees, understanding their rights, meeting your obligations and confirming compliance with The Pensions Regulator.
For new employers, that means completing the initial declaration of compliance within five months of the duties start date.
For established employers, it means remembering the three-year re-enrolment and re-declaration cycle.
Even where nobody needs to be enrolled or re-enrolled, a declaration may still be required. The forms themselves aren't necessarily complicated. Forgetting them can create problems that are entirely avoidable.
Don't assume that because nobody is paying into a pension, there's nothing left to do. Sometimes the most important part of compliance is making sure you've completed the paperwork that confirms you've done everything required.
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