Understand workplace pensions and automatic enrolment

Who must be assessed?

Automatic-enrolment duties generally begin with people who meet the pension-law definition of a worker and ordinarily work in Great Britain. Employment labels alone are not always enough. Cross-border working, agency arrangements and disputed status can need specialist review.

The employer should establish:

• whether the person is a worker for automatic-enrolment purposes;
• whether they ordinarily work in Great Britain;
• the correct duties or employment start date;
• their age band at the assessment date;
• earnings in the applicable pay reference period;
• whether they are already an active member of a qualifying scheme;
• whether valid postponement or another special rule applies.

Do not automatically exclude temporary, part-time, casual or irregular-hours workers. Equally, do not assume that every person on payroll must be automatically enrolled. The assessment produces an eligible jobholder, non-eligible jobholder, entitled worker or an outcome outside the statutory age bands used in this lesson.

Directors require a separate check

A sole director with no other staff can have a different automatic-enrolment position from an ordinary employer. Multi-director and mixed-workforce structures also need their facts checked. Use the director-only payroll guide rather than applying a blanket director exemption.

Use the pay reference period that applies

The 2026/27 thresholds vary by pay frequency. A fortnightly worker must be assessed against the fortnightly values; payroll must not annualise that period and substitute the annual threshold. This is particularly important for care, hospitality and other work where earnings fluctuate.

Apply the boundaries consistently

• The statutory worker categories used here cover ages 16 through 74 inclusive.
• Eligible-jobholder age is at least 22 but below State Pension age.
• Earnings must be strictly greater than the automatic-enrolment trigger for eligible-jobholder treatment.
• Earnings exactly at the lower level remain in the entitled-worker band.
• Earnings above the lower level and at or below the trigger fall into the non-eligible-jobholder band.
• The upper level caps the usual qualifying-earnings contribution basis; it does not change the worker category.

For monthly assessment, £520 is at the lower boundary and £833 is at the trigger boundary. A worker in the eligible age band paid exactly £833 is not above the trigger. Earnings of £833.01 are above it. Age 22 enters the eligible age band; State Pension age leaves it. Age 74 remains within the wider worker categories, while age 75 is outside them.

What the categories mean

The guide is educational, not an individual eligibility determination. Check State Pension age, worker status, existing membership, scheme terms, directors and overseas work before acting.

Enrol eligible jobholders

When the worker meets the eligible-jobholder tests, the employer must arrange active membership of a qualifying automatic-enrolment scheme unless a permitted exception or valid postponement applies. Give the required information, start the correct contributions and retain the enrolment evidence.

Workers must not be encouraged or pressured to opt out. An opt-out happens only after membership is established and follows the pension scheme’s valid process. The employee’s decision must be free from employer influence.

Respond to opt-in and joining rights

A non-eligible jobholder can give the employer a valid opt-in notice. The employer then arranges membership of an automatic-enrolment scheme and pays the applicable employer contribution. An entitled worker can ask to join a pension scheme, but that category alone does not require an employer contribution.

Postponement is optional and time limited

Postponement can set a deferral date up to three months and one day after the relevant duties start date, employment start date or date the worker first becomes eligible. It delays the assessment or automatic-enrolment duty; it does not erase worker rights or change the employer’s duties start date.

The employer must:

1. choose a permitted postponement date and deferral date;
2. give the individual notice within six weeks and one day;
3. explain the right to opt in or join during postponement;
4. assess the worker on the deferral date;
5. enrol them if the criteria are met then.

Postponement cannot be used at automatic re-enrolment. A probation period also does not create a pension exemption. Use the specialist automatic enrolment during probation guide for that case.

Qualifying earnings are not always pensionable pay

The statutory qualifying-earnings band is one common basis, but the scheme may define pensionable pay differently. Payroll must configure the basis the employer and provider actually use and confirm that it satisfies the qualifying-scheme rules. Do not copy National Insurance thresholds into pension settings.

For many minimum automatic-enrolment arrangements, the total minimum contribution is 8% of qualifying earnings, with at least 3% from the employer. Scheme rules may require higher contributions or use another certified basis.

Worked monthly example

Assume Riverside’s scheme uses qualifying earnings and statutory minimum contribution rates. A worker receives £2,100 in a monthly pay reference period:

How the £79 appears as an employee deduction and/or tax relief depends on whether the scheme uses relief at source, net pay or another permitted arrangement. This example is not a salary-sacrifice example and does not establish that the scheme itself is qualifying.

Connect payroll without overclaiming automation

Payroll needs the worker category, enrolment date, scheme, contribution basis, rates and provider identifiers. It must produce the agreed output and retain an audit trail. Do not assume every payroll product submits automatically to every pension provider.

The pension contribution calculator projects retirement savings from user assumptions. It does not determine automatic-enrolment eligibility, prove a scheme is qualifying or replace payroll reconciliation.

Duties continue after enrolment

Monitor workers and pay-reference-period changes, process valid notices, reconcile contributions, retain provider acknowledgements and complete the declaration of compliance. Cyclical re-enrolment and re-declaration normally return on the employer’s three-year cycle. Postponement cannot be used to avoid re-enrolment.

A later drop below the automatic-enrolment trigger does not automatically remove an enrolled worker from pension membership. If earnings remain above the lower qualifying-earnings level, contributions normally continue. Below that level, check the pension scheme rules. Never build a system that automatically unenrols someone because one irregular pay period is lower.

Most automatic-enrolment records must be retained for at least six years. Opt-out records must be retained for four years. Keep original-format opt-in, joining and opt-out notices, assessment and postponement evidence, contribution values, payment dates and pension-scheme records. Check TPR’s record-keeping guidance.

Three key takeaways

1. Assess the worker using the age and earnings thresholds for the actual pay reference period.
2. Enrolment, postponement, opt-in and joining are different actions with different evidence.
3. Membership and contribution duties continue after the first assessment; a low-paid month does not simply switch them off.

What comes next

Lesson 6, Build gross pay from approved inputs, teaches how approved salary, hours and pay elements become a controlled gross-pay schedule. Continue when the pension assessment and scheme basis are recorded.

Related resources: TPR assessment guidance, 2026/27 thresholds, probation and postponement, and the pension contribution projection calculator.