Auto-Enrolment Pension Duties for a New Employer (2026)
The moment you take on your first member of staff — even just one — you take on legal pension duties, regardless of how small your business is. This guide from Filing Accounts UK explains exactly what auto-enrolment requires, using only verified facts from The Pensions Regulator and current 2026/27 thresholds.
At Filing Accounts, we help small employers set up payroll and pension compliance correctly from day one.
Auto-Enrolment Applies From Your First Employee
Since February 2018, auto-enrolment duties apply to every UK employer, even a business with just one member of staff. Your “duties start date” is the day your first worker begins employment — there’s no small-employer exemption, and no grace period before the legal obligation begins.
Who Must Be Auto-Enrolled?
Staff fall into three categories, based on age and earnings:
| Category | Criteria (2026/27) | Employer Must |
|---|---|---|
| Eligible jobholder | Aged 22 to State Pension age, earning over £10,000/year | Automatically enrol, with employer contribution |
| Non-eligible jobholder | Aged 16–74, earning £6,240–£10,000, or aged 16–21/SPA–74 earning over £10,000 | Enrol only if they opt in, with employer contribution |
| Entitled worker | Earning under £6,240/year | Enrol only if they ask to join; no employer contribution required |
For 2026/27, the earnings trigger (£10,000), lower earnings limit (£6,240), and upper earnings limit (£50,270) are unchanged from the previous tax year.
Minimum Contribution Levels
Contributions are calculated on qualifying earnings — the band between £6,240 and £50,270 — not your employee’s full salary. The current minimum total contribution is 8% of qualifying earnings, split as:
- 3% minimum from the employer
- 5% from the employee (this includes tax relief, so the actual cost to the employee is slightly less than 5% of pay)
You can choose to contribute more than the 3% minimum — if you contribute the full 8% yourself, your employee isn’t required to contribute anything at all, unless they choose to.
What You Need to Do, Step by Step
Step 1: Choose a Pension Scheme
Select a scheme that meets auto-enrolment requirements — The Pensions Regulator’s website lists compliant providers.
Step 2: Assess Your Staff
Work out which category each employee falls into, based on age and earnings, every pay period — not just once.
Step 3: Enrol Eligible Staff
Eligible jobholders must usually be enrolled within 6 weeks of their duties start date (or the date they became eligible). If you need more time, you can use postponement — delaying assessment by up to 3 months — but you must write to the employee confirming this within 6 weeks of the original duties start date.
Step 4: Write to Your Staff
Every worker must be told individually how auto-enrolment affects them, whether they’ve been enrolled, opted in, or are simply entitled to join.
Step 5: Complete Your Declaration of Compliance
Confirm to The Pensions Regulator that you’ve met your duties — normally within 5 months of your duties start date (extended slightly if you used postponement). Missing this is one of the most common compliance failures among new small employers.
Step 6: Keep Records and Re-Enrol Periodically
Every 3 years, you must re-assess and re-enrol any eligible staff who previously opted out, giving them another opportunity to join.
Can Employees Opt Out?
Yes — workers can opt out within 1 month of being enrolled and receive a full refund of any contributions already deducted. Opting out doesn’t remove your duty to re-enrol them every 3 years, or to auto-enrol any new staff who meet the criteria.
Auto-Enrolment at a Glance
| Item | 2026/27 Detail |
|---|---|
| Earnings trigger | £10,000/year |
| Lower earnings limit | £6,240/year |
| Upper earnings limit | £50,270/year |
| Minimum total contribution | 8% of qualifying earnings |
| Minimum employer contribution | 3% |
| Assessment/enrolment deadline | Within 6 weeks of duties start date |
| Declaration of compliance deadline | Within 5 months of duties start date |
| Opt-out window | Within 1 month, full refund |
| Re-enrolment cycle | Every 3 years |
Common Mistakes to Avoid
Assuming a One-Person or Tiny Business Is Exempt
There’s no exemption for small employers — duties begin the day your first employee starts.
Missing the Declaration of Compliance
This is a separate step from actually setting up the pension — forgetting to formally declare compliance to The Pensions Regulator is one of the most common failures.
Not Reassessing Staff Every Pay Period
An employee’s category can change with a pay rise or birthday — assessment isn’t a one-off exercise.
Forgetting Re-Enrolment Every 3 Years
Staff who opted out must be given another chance to join every 3 years, regardless of their previous decision.
Frequently Asked Questions
Does auto-enrolment apply if I only have one employee?
Yes. Every UK employer has auto-enrolment duties from their first employee’s start date, regardless of business size.
What’s the minimum pension contribution?
8% of qualifying earnings in total, with at least 3% from the employer.
Can an employee opt out?
Yes, within 1 month of enrolment, with a full refund of contributions made so far.
What happens if I miss my declaration of compliance deadline?
The Pensions Regulator can issue fixed and escalating penalty notices for non-compliance.
Setting Up Payroll and Pensions? Talk to Filing Accounts UK
At Filing Accounts, we help new employers set up payroll and auto-enrolment compliance correctly from their very first hire.
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