Auto-enrolment requires every UK employer to enrol eligible employees in a qualifying workplace pension scheme. For 2026/27, the employer minimum contribution is 3% of qualifying earnings, with a total minimum of 8% (employer + employee + tax relief). The earnings trigger is £10,000 a year; the qualifying earnings band runs from £6,240 to £50,270. The Pensions Regulator (TPR) supervises the regime and can issue fines for non-compliance.
This guide covers who must auto-enrol, the 2026/27 thresholds, contribution rates, scheme set-up, ongoing duties (including triennial re-enrolment), and the most common compliance mistakes.
Who must auto-enrol
Every UK employer with one or more eligible workers must operate auto-enrolment. There is no employer-size exemption. Sole-director companies with no other employee are typically not in scope, but as soon as you have a second employee or a director who is also a worker, the duties engage.
A worker is “eligible” if they:
- Are aged between 22 and State Pension age
- Earn more than the £10,000 earnings trigger in 2026/27
- Work, or ordinarily work, in the UK
Workers below the earnings trigger but above the lower limit of qualifying earnings are “non-eligible jobholders” — they can opt in and the employer must contribute. Workers below the qualifying-earnings lower limit are “entitled workers” — they can join the scheme but the employer is not required to contribute.
2026/27 thresholds
The Pensions Regulator and Department for Work and Pensions confirm the auto-enrolment thresholds annually.
| Threshold | 2026/27 |
|---|---|
| Earnings trigger | £10,000 |
| Qualifying earnings lower limit | £6,240 |
| Qualifying earnings upper limit | £50,270 |
Qualifying earnings are gross earnings (including overtime, bonuses, commission, statutory pay) between the lower and upper limits. Contributions are calculated on this band, not on full earnings.
Contribution rates
The minimum contributions for 2026/27:
| Source | Minimum contribution |
|---|---|
| Employer | 3% of qualifying earnings |
| Employee | 5% of qualifying earnings (includes 1% government tax relief on basic-rate slice) |
| Total | 8% of qualifying earnings |
Employers can pay more than 3% if they wish. Some employers cover the full 8% as a benefit, in which case the employee pays nothing.
Salary sacrifice can structure pension contributions efficiently. The employee gives up part of their gross salary in exchange for an employer pension contribution of equivalent value. Both employee and employer NI is saved on the sacrificed amount.
Salary sacrifice cannot reduce earnings below the National Minimum Wage.
Setting up a scheme
Five steps to set up auto-enrolment for the first time:
1. Choose a provider
Common providers:
- NEST — government-backed default, free for employers, best for small employers
- The People’s Pension — non-profit master trust, B Corp
- Smart Pension — tech-led, strong payroll integration
- Aviva, Royal London, Scottish Widows — adviser-led, typically suit larger employers
For a side-by-side comparison, see workplace pension providers UK compared.
2. Assess your workforce
Identify which workers are eligible jobholders, non-eligible jobholders, or entitled workers. Most accounting/payroll software does this automatically based on age and earnings.
3. Communicate with workers
You must give written notification to each worker about their auto-enrolment position and rights, within six weeks of the duty start date (or new joiner’s enrolment date). Most providers supply template communications.
4. Enrol
Eligible jobholders are enrolled automatically. Non-eligible jobholders and entitled workers can be opted in but are not auto-enrolled.
5. Declare compliance to The Pensions Regulator
Submit a declaration of compliance to TPR within five months of the duty start date. The declaration confirms what scheme you have used, who you have enrolled, and the contribution rates.
Ongoing duties
Auto-enrolment is not a one-off setup. Ongoing duties include:
Re-enrolment every three years
Every three years, employers must re-enrol any workers who have previously opted out. The re-enrolment date must be within a six-week window around the third anniversary of your original duty start date.
The cycle continues every three years. Employers must complete a re-declaration of compliance to TPR after each re-enrolment.
Triennial declaration
After each re-enrolment, submit a re-declaration of compliance within five months.
New employee assessment
Every new employee must be assessed on day one. If they meet the eligibility criteria, enrol them within the postponement window (up to three months postponement is allowed).
Auto-enrolment after opt-out
Employees who opt out can rejoin at any time. After opt-out, the employer is not required to enrol them again until the triennial re-enrolment date.
Penalties and enforcement
The Pensions Regulator enforces the regime. Penalties include:
- Fixed penalty notice of £400 for failure to comply with statutory notices
- Escalating penalty notices of £50 to £10,000 per day for ongoing non-compliance
- Civil penalty up to £5,000 for individuals or £50,000 for companies in the most serious cases
TPR also publishes the names of non-compliant employers, with reputational consequences.
Personal liability for directors comes through the Pensions Act 2008. A director who consents to or connives at non-compliance can be personally liable for penalties.
Common mistakes
Five frequent compliance failures:
Missing the staging duty start date
The duty start date is the date you employ your first worker. Many small employers do not realise the auto-enrolment clock starts immediately, not on some later date.
Wrong qualifying earnings calculation
Including or excluding the wrong earnings components — most commonly forgetting to include overtime, bonuses, commission, or statutory pay in the qualifying-earnings calculation.
Not re-declaring at the three-year point
Triennial re-enrolment is easy to forget because there is no automatic prompt. Diary it three years from the original duty start date.
Salary sacrifice errors
Setting up sacrifice without proper documentation, or letting sacrifice take an employee below National Minimum Wage. Both can void the sacrifice and create unexpected NI liabilities.
Director-only companies thinking they are exempt
A sole-director company with no other workers may be out of scope, but the moment a second worker (employee or director) joins, the duties engage immediately. Many small employers miss this transition.
Key takeaways
- All UK employers with eligible workers must auto-enrol
- Earnings trigger £10,000; qualifying earnings band £6,240–£50,270 for 2026/27
- Employer minimum 3%, total minimum 8% of qualifying earnings
- Re-enrolment every three years for opted-out workers
- TPR enforces with penalties up to £10,000 per day for ongoing non-compliance
- Sole-director companies with no other workers are typically out of scope; this changes immediately when a second worker joins
Frequently asked questions
What is the employer minimum contribution for 2026/27? 3% of qualifying earnings. Total minimum (employer plus employee plus government tax relief) is 8% of qualifying earnings, calculated on the band £6,240 to £50,270.
Do single-director limited companies have to auto-enrol? Generally no, where the director is the only worker. The duties engage immediately when a second worker is employed (whether another director or an employee).
What happens if I don’t comply with auto-enrolment? The Pensions Regulator can issue fixed penalty notices of £400 and escalating daily penalties up to £10,000. Civil penalties of up to £50,000 apply in the most serious cases. Director personal liability is also possible.
What is triennial re-enrolment? Every three years, employers must re-enrol any workers who previously opted out. The re-enrolment date is within a six-week window around the third anniversary of the original duty start date, with a re-declaration to TPR within five months.
Can salary sacrifice be used for auto-enrolment contributions? Yes. The employee gives up gross salary in exchange for an employer pension contribution of equivalent value. Both NI charges are saved on the sacrificed amount, but the sacrifice cannot reduce earnings below National Minimum Wage.
Useful resources
The Pensions Regulator — Employers https://www.thepensionsregulator.gov.uk/en/employers
GOV.UK — Auto-enrolment thresholds 2026/27 https://www.gov.uk/government/publications/review-of-the-automatic-enrolment-earnings-trigger-and-qualifying-earnings-band-for-202627
NEST Pensions https://www.nestpensions.org.uk/