The day you employ your first worker in the UK — even part-time, even a single director-employee in some cases — you become subject to the auto-enrolment regime overseen by The Pensions Regulator (TPR). The rules apply equally to a 200-person warehouse and a two-person startup, and the penalties for ignoring them are punitive.
This guide walks new employers through the obligations you must meet in the first 90 days, the contribution levels you need to fund, and the practical decisions you can make to keep cost and complexity under control.
Who must be auto-enrolled
An "eligible jobholder" is anyone who is aged between 22 and State Pension age, ordinarily works in the UK, and earns above the auto-enrolment trigger of £10,000 per year (£833 per month, £192 per week). These workers must be enrolled automatically into a qualifying workplace pension and contributions must start from their enrolment date.
Workers who fall outside that trigger still have rights. "Non-eligible jobholders" — under 22, over State Pension age, or earning between the lower threshold (£6,240) and the trigger (£10,000) — can opt in and receive employer contributions. "Entitled workers" earning below £6,240 can ask to join but the employer does not have to contribute. The administration runs whether or not anyone actually joins.
The minimum contribution: 8% on qualifying earnings
The statutory minimum is 8% of qualifying earnings, split 3% employer / 5% employee (the employee figure includes basic-rate tax relief, so the cash deduction is 4%). "Qualifying earnings" are the band between £6,240 and £50,270 — pay above or below those figures is excluded from the calculation by default.
Many employers choose to contribute more than the minimum, either as a recruitment lever or because they use a different definition of pensionable pay (basic pay, total pay, or a self-certified equivalent). Whatever basis you pick, you must document it in your scheme rules and apply it consistently.
Postponement: a 3-month breathing space
You can postpone auto-enrolment for up to 3 months from a worker's start date. This is useful for short-term contracts, probationary periods, or simply to align everyone to a common monthly payroll cycle. You must issue a postponement notice within 6 weeks of the deferral date. At the end of postponement you must assess eligibility again and enrol everyone who still qualifies.
Choosing a scheme
NEST (the government-backed master trust) accepts every employer and is the default for many new businesses. Commercial providers — The People's Pension, Smart Pension, Aviva, Royal London, Standard Life — offer richer investment choice, better default funds, and integration with most payroll software. Picking the right scheme at the outset is much easier than migrating later.
Your Declaration of Compliance
Within 5 months of your duties start date you must submit a Declaration of Compliance to TPR confirming the scheme you chose, the workers you assessed, and the contributions you started. Missing this deadline triggers a fixed £400 penalty followed by daily escalating fines.
What PushDigits sets up
Our payroll service handles the full auto-enrolment lifecycle: assessing each worker every pay period, issuing statutory communications within the statutory windows, deducting contributions, uploading data to your provider, and managing opt-ins and opt-outs. We also coordinate with your business advisory contact when contribution levels need to flex around cash-flow constraints.
If you are about to hire your first employee — or you have inherited a scheme and you are not sure it is compliant — book a 30-minute call with one of our chartered accountants. We will walk through your obligations and have you compliant in days, not months. You can also reach the team via our contact page.