Workplace Pension Auto-Enrolment 2026: Complete Compliance Guide

Every UK employer must automatically enrol eligible workers into a workplace pension scheme. Auto-enrolment has been in force since 2012, but the rules around thresholds, contributions, and re-enrolment still catch employers out. Non-compliance can result in penalties from The Pensions Regulator (TPR), starting with fixed notices and escalating to daily fines of up to £10,000.

This guide covers everything you need to know to stay compliant in 2025/26.

Who must comply

Auto-enrolment applies to every employer in the UK with at least one worker. This includes:

• Limited companies with employees
• Sole traders and partnerships with employees
• Charities and not-for-profit organisations with employees
• Employers who use agency workers (the party who pays the worker is responsible)

There is no exemption based on size. Even a business with a single part-time employee must assess their auto-enrolment obligations.

Worker categories and thresholds for 2025/26

Not every worker gets automatically enrolled. The duty depends on their age and earnings. Workers fall into three categories:

The £10,000 trigger is based on annual earnings. For workers paid weekly, the equivalent weekly trigger is approximately £192. For monthly-paid workers, it is approximately £833.

Minimum contribution rates

The minimum contributions for auto-enrolment are based on qualifying earnings — the band of earnings between £6,240 and £50,270 per year (2025/26 figures).

Worked example for an employee earning £25,000:

Qualifying earnings = £25,000 - £6,240 = £18,760

• Employer minimum: £18,760 x 3% = £562.80 per year
• Employee minimum: £18,760 x 5% = £938.00 per year
• Total: £1,500.80 per year

Many employers choose to calculate contributions on total gross pay rather than qualifying earnings, which simplifies payroll but may result in higher contributions.

Alternative certification

Instead of using qualifying earnings, you can certify that your pension scheme meets the minimum requirements using one of three alternative sets of requirements. These allow you to base contributions on basic pay or total pay from the first pound, which can be simpler to administer. The sets are defined in the Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010.

Setting up your pension scheme

If you do not already have a qualifying workplace pension scheme, you need to set one up before your duties begin.

NEST (National Employment Savings Trust)

NEST is the government-backed pension scheme designed specifically for auto-enrolment. Key features:

• Must accept any employer — no refusal
• Low charges (1.8% contribution charge on new payments, 0.3% annual management charge)
• Easy online administration
• Suitable for most small employers

Other providers

You can use any pension scheme that meets the qualifying criteria. Larger employers often use schemes from providers such as Aviva, Scottish Widows, Royal London, or The People's Pension. Compare charges, investment options, and administrative ease before choosing.

The enrolment process

Initial enrolment

When you identify an eligible jobholder, you must:

1. Enrol them into your pension scheme from their automatic enrolment date (usually their first day of employment or the date they become eligible)
2. Write to them within six weeks of their enrolment date, explaining they have been enrolled, the contribution rates, and their right to opt out
3. Start making contributions from the enrolment date
4. Deduct employee contributions from their pay and remit to the pension provider along with your employer contributions

Postponement

You can delay automatic enrolment for up to three months using a postponement notice. This is useful for:

• Employees on probation periods (avoid enrolling someone who may not stay)
• Temporary or seasonal workers
• Employees nearing a threshold boundary

During postponement, you must:

• Give the worker a postponement notice within six weeks of their start date
• State the date postponement ends
• Inform them of their right to opt in during the postponement period

If the worker opts in during postponement, you must enrol them from the opt-in date. You cannot refuse.

After postponement ends, reassess the worker. If they are still an eligible jobholder, enrol them immediately.

Opt-out and refunds

Employees can choose to opt out of auto-enrolment within one month of being enrolled (the opt-out period). If they opt out within this window:

• All contributions paid by the employee must be refunded in full
• The employee is treated as if they were never a member of the scheme
• You must not encourage or incentivise opt-out — doing so is a criminal offence

After the one-month opt-out window, the employee can still cease membership, but contributions already paid are not refunded and remain in the pension pot.

Re-enrolment (cyclical duties)

Every three years, you must re-enrol workers who have previously opted out or ceased membership. This is known as your re-enrolment duty.

How re-enrolment works

1. Choose your re-enrolment date — this must be within a six-month window (three months before to three months after the third anniversary of your staging date or last re-enrolment date)
2. Assess all workers on that date to identify those who have opted out or ceased membership and are now eligible jobholders
3. Re-enrol eligible workers — they go back into the pension scheme
4. Write to re-enrolled workers within six weeks, explaining they have been re-enrolled and their right to opt out again
5. Complete a re-declaration of compliance with The Pensions Regulator within five months of your re-enrolment date

Exemptions from re-enrolment

You do not need to re-enrol workers who:

• Opted out or ceased membership within the 12 months before your re-enrolment date
• Have given notice to terminate employment
• Are over 74 years of age

Employer penalties

The Pensions Regulator has significant enforcement powers:

Daily penalties are based on the number of employees:

• 1-4 employees: £50 per day
• 5-49 employees: £500 per day
• 50-249 employees: £2,500 per day
• 250+ employees: £10,000 per day

Record keeping

You must keep certain records for six years:

• Names and addresses of workers enrolled, opted-out, or who ceased membership
• Dates of enrolment, opt-out, and re-enrolment
• Pension scheme details and contribution amounts
• Correspondence with workers about their enrolment
• Employer and employee contribution amounts paid

For workers who opted out, keep the opt-out notice for four years.

Auto-enrolment and payroll

Pension contributions must be calculated and deducted through your payroll. Ensure your payroll software:

• Correctly identifies eligible jobholders at each pay period
• Calculates contributions on qualifying earnings (or your chosen alternative)
• Deducts employee contributions from net pay (or gross pay under salary sacrifice)
• Reports pension contributions accurately on the FPS to HMRC (see our PAYE RTI guide)

If you use salary sacrifice for pension contributions, both employer and employee contributions are paid by the employer from gross pay. This saves employer NI on the sacrificed amount — see our NI rates guide for the potential savings.

Frequently asked questions

Next steps

Key takeaways

Auto-enrolment compliance requires ongoing attention, not just a one-time setup. Assess workers at every pay period, maintain accurate records, complete re-enrolment every three years, and never encourage opt-out. The minimum employer contribution of 3% on qualifying earnings is a cost of doing business — build it into your employment budgets from the start.

Use our Payroll Tax Calculator to calculate the full cost of each employee including pension contributions, NI, and tax.