Who must be auto-enrolled into a pension under the Pensions Act 2008

Automatic enrolment makes the employer, not the worker, responsible for getting eligible staff into a workplace pension. The duty comes from the Pensions Act 2008^[1], and The Pensions Regulator (TPR)^[2] enforces it. Whether a particular worker must be enrolled depends on age and earnings, and the flow above sorts every worker into one of three categories. The thresholds shown are for 2026/27, confirmed unchanged from 2025/26 by the DWP annual review^[3].

The first test creates an eligible jobholder: a worker aged 22 up to State Pension Age who earns more than £10,000 a year (the earnings trigger). An eligible jobholder must be automatically enrolled, and the employer must contribute. The worker can then choose to opt out within the opt-out window and get a refund, but the default is enrolment — the duty is on the employer to act first.

A worker who is not eligible falls into one of two further categories. A non-eligible jobholder earns above £6,240 (the lower limit of the qualifying earnings band) but either earns below the £10,000 trigger, or is aged 16–21 or between State Pension Age and 74. They are not auto-enrolled, but they have the right to opt in, and if they do the employer must contribute. An entitled worker earns £6,240 or less: they can ask to join a scheme, but the employer is not required to contribute. The distinction matters because it changes the employer's cost, not just the paperwork.

On money, the minimum total contribution is 8% of qualifying earnings under section 20 of the Pensions Act 2008^[6]. The employer must pay at least 3%; the worker usually pays the remaining 5%, of which 1% is government tax relief. Contributions are calculated on earnings within the qualifying band only — between £6,240 and £50,270 for 2026/27 — not on the whole salary, so the first £6,240 and anything above £50,270 are excluded. On a £30,000 salary the 8% falls on £23,760, not the full wage, so the real cost sits below a flat 8% of gross. Every figure is reviewed each tax year, so a 2026/27 contribution should not be reused later without checking; and State Pension Age is itself rising, currently 66 and increasing to 67 between 2026 and 2028, which shifts the upper age boundary of the eligible-jobholder test.

The worker's tax relief on a pension contribution arrives one of two ways, both resting on section 188 of the Finance Act 2004^[7]. Under a net pay arrangement (section 193^[8]), the contribution comes out of gross pay before income tax, so relief at the worker's marginal rate is automatic and there is nothing to reclaim; most occupational schemes use it. Under relief at source (section 192^[9]), the contribution comes out of net pay and the provider reclaims 20% from HMRC, so an £80 contribution becomes £100 in the pot; higher and additional-rate savers claim the extra relief through Self Assessment^[10]. The two diverge for a low earner below the £12,570 Personal Allowance: net pay gives them nothing to relieve, while relief at source still adds the 20% top-up, so HMRC now pays a matching top-up to low earners in net pay schemes from 2024/25 onward.

A charity donation can also run through the payslip. Payroll Giving (Give As You Earn), under sections 713 to 715 of ITEPA 2003^[11], takes the gift from gross pay after National Insurance but before income tax, giving relief at the worker's marginal rate^[12] at the point of giving with no Gift Aid claim. A £10 gift nets to £8.00 at the 20% basic rate, £6.00 at 40% higher rate and £5.50 at 45% additional rate (a Scottish higher-rate donor saves 42%). Unlike pension salary sacrifice it saves no National Insurance, because it sits after the NI line, and there is no upper limit on what can be given.

Confirm current auto-enrolment figures with TPR^[5]. Auto-enrolment sets the floor, tax relief decides what each contribution actually costs, and Payroll Giving is the one charitable route that delivers higher-rate relief straight through pay without a separate claim.