Pensions and payroll: making auto-enrolment run itself

Auto-enrolment can run almost on its own if your payroll software and pension scheme are linked. The software assesses each worker every pay period, deducts the right contributions, and sends the data to the scheme, so you only approve the run and pay the collection. You still own the legal duties, so a few checks stay with you.

What can payroll software do for auto-enrolment?

Good payroll software can handle every routine auto-enrolment task. The Pensions Regulator (TPR) says your software or payroll process should do these each pay cycle:

• assess which staff should be put into a pension scheme
• hold the data needed for enrolment, such as names, addresses, dates of birth and earnings
• calculate employer and employee contributions using the right tax relief method
• send accurate staff and contribution data to the scheme in the format it needs
• produce staff letters at the right time
• handle requests to join or opt in, stop deductions, and refund opt-outs and leavers
• apply postponement flexibly for different types of worker
• keep records for up to six years

If your software cannot do these, TPR says you should update or change it, or ask your pension provider whether it can do them instead.

What figures does the software apply in 2026/27?

The software tests each worker’s age and pay against fixed thresholds. TPR’s earnings thresholds for 2026/27 are:

Workers aged 22 to State Pension age who earn over the trigger and normally work in the UK must be enrolled. The minimum total contribution is 8% of qualifying earnings, with at least 3% from the employer. To model the cost for one worker, use the pension contributions calculator.

How does the link between payroll and pension work?

There are two common ways to move data from payroll to the pension scheme.

With an API, data flows both ways. The People’s Partnership, which runs The People’s Pension, says its Payroll Integration API lets payroll software submit employee details and contribution amounts at the end of each payroll run, and pull back the list of staff who have opted out. Each employer authorises the link before any data moves.

Which providers connect by API depends on your payroll software, so check both sides before you choose. Our comparison of workplace pension providers is a good starting point.

How to set it up, step by step

1. Check your payroll software supports automatic enrolment. Look for assessment, letters, postponement and an export or API for your scheme.
2. Choose a scheme that connects to your software. Ask whether it accepts an API link or only file uploads.
3. Match the scheme settings in payroll. Enter the contribution rates, the earnings basis (qualifying earnings or full pay) and the tax relief method (net pay or relief at source).
4. Authorise the connection. For an API link, sign in to the scheme and approve access for your payroll software.
5. Run a test payroll. Check that the right staff are assessed and that the contributions match.
6. Set the payment. A Direct Debit to the scheme stops you missing the deadline.
7. Declare compliance. Complete your declaration of compliance with TPR after your duties start date.

What still needs a human?

Some steps cannot be fully automated, because the law puts the duty on you as employer.

• Paying on time. Contributions deducted from pay must reach the scheme by the 22nd of the next month, or the 19th by cheque, per TPR.
• Enrolling new starters within six weeks. GOV.UK sets the six-week limit from the day staff meet the criteria.
• Re-enrolment every three years. You choose a date from three months before to three months after your anniversary, and complete a re-declaration within five calendar months of the third anniversary of your duties start date.
• Fixing errors. If someone’s pay or date of birth is wrong in payroll, the assessment will be wrong too.
• Watching for failed uploads. An API or file can fail without anyone noticing. Check the scheme portal after each run.

TPR can issue a £400 fixed penalty and then an escalating penalty of £50 to £10,000 a day if you do not comply.

Which applies to you?

• If you use HMRC’s Basic PAYE Tools, you need your own process to assess staff and calculate contributions, and must ask your pension provider how to get the data to them. Moving to software is usually easier.
• If you use a payroll bureau or accountant, check their software supports auto-enrolment and agree who pays the scheme. See payroll bureau vs software.
• If you are a sole director with no staff, you may have no duties at all. See auto-enrolment for directors.
• If you already use payroll software with a file upload, ask your scheme whether it offers an API link for your software.

What to do now

1. Check your payroll software against TPR’s list of tasks above.
2. Diarise the 22nd of each month and your re-enrolment window.
3. Review a recent payroll run against the scheme portal to confirm the figures match.
4. Read our guide to pension auto-enrolment for the full set of duties.

Frequently asked questions

Can payroll software do auto-enrolment automatically?

Yes, if it is set up for automatic enrolment. TPR says it should assess staff, calculate contributions, send data to the scheme and produce staff letters each pay cycle.

What is the auto-enrolment earnings trigger for 2026/27?

It is £10,000 a year, or £833 a month. Qualifying earnings run from £6,240 to £50,270.

When must pension contributions be paid to the scheme?

By the 22nd of the month after you deducted them from pay, or the 19th if you pay by cheque.

Does HMRC’s Basic PAYE Tools do auto-enrolment?

Not fully. TPR says users need their own process to assess staff and calculate contributions.

Do I need to re-declare compliance if nobody needs re-enrolling?

Yes. You must complete a re-declaration of compliance every three years, even if you have nobody to re-enrol.