Any worker aged 22 to State Pension age earning over £10,000 a year and ordinarily working in the UK, under the Pensions Act 2008. Auto-enrolment applies from the very first employee with no exemption for small employers.
2025/26 auto-enrolment numbers
| Element | Threshold or rate | Note |
|---|---|---|
| Eligibility (auto-enrol trigger) | Worker aged 22 to State Pension age earning >£10,000/yr | Workers 16–74 outside the band can opt in voluntarily |
| Qualifying earnings band | £6,240 to £50,270/yr (£520 to £4,189/month) | Earnings outside the band are not subject to minimums |
| Minimum total contribution | 8% of qualifying earnings | Many employers contribute above the minimum |
| Minimum employer share | 3% | Statutory floor; employer can pay more |
| Typical employee share | 5% | Total = 8% minus the employer share |
| Re-enrolment cadence | Every 3 years (6-month window) | Notify The Pensions Regulator with a re-declaration |
Can an employee opt out?
Within one month of being enrolled. Contributions paid during that window are refunded; outside it the contributions stay in the pension fund. Employers must re-enrol any opted-out employee every three years and submit a re-declaration of compliance to The Pensions Regulator.
How does tax relief work?
Either via net pay arrangement (relief at the employee's marginal rate, applied before payroll calculates tax) or relief at source (basic-rate relief is added to the pension fund and higher-rate taxpayers claim the rest via Self Assessment). The understanding your payslip article shows how the pension deduction lands on a payslip.
In 7 steps
How to Set Up Workplace Pension Auto-Enrolment as a UK Employer
Auto-enrolment is a statutory duty under the Pensions Act 2008 from your first employee onward. Identify eligible workers, pick a qualifying scheme, calculate qualifying earnings, apply the minimum contributions, and manage opt-outs and three-yearly re-enrolment.
- 1
Identify eligible workers
Auto-enrol any worker aged between 22 and State Pension age who earns more than £10,000 a year and ordinarily works in the UK. Workers aged 16–74 outside that earnings or age window can opt in; you must contribute for them too if they earn above the lower qualifying earnings threshold.
- 2
Choose a qualifying pension scheme
Pick a scheme that meets the auto-enrolment criteria. Common choices include NEST, NOW: Pensions, The People’s Pension, or a workplace scheme provided by a major insurer.
- 3
Calculate qualifying earnings
Contributions for 2025/26 are calculated on a band of earnings: above £6,240 and up to £50,270 a year (£520–£4,189 monthly). Some employers use a different basis such as total earnings or basic pay, which usually means higher contributions but simpler payroll.
- 4
Apply the minimum contribution split
The legal minimum is 8% of qualifying earnings: at least 3% from the employer and the rest (typically 5%) from the employee. Many schemes contribute more than the minimum.
- 5
Set the tax-relief method
Choose between net pay arrangement (relief at the employee’s marginal rate, applied before tax) or relief at source (basic-rate relief is added to the pension fund and higher-rate taxpayers claim the rest via Self Assessment).
- 6
Handle opt-outs within the one-month window
An employee can opt out within one month of being enrolled and get any contributions refunded. After that they can stop contributions but the money stays in the pension fund.
- 7
Re-enrol every three years and notify The Pensions Regulator
Re-enrol any opted-out employee every three years on a date you choose within a six-month window, and submit a re-declaration of compliance to The Pensions Regulator.
Primary sources
- Pensions Act 2008 — legislation.gov.uk — Statutory framework for workplace pension auto-enrolment
- Workplace pensions duties checker — gov.uk — Duties checker, eligibility, and ongoing compliance
- Workplace pensions — what employers need to do — gov.uk — Qualifying earnings, minimum contributions, opt-outs
Editorial process: how we source and review UK tax content.