How to set up a workplace pension scheme

You must set up a workplace pension scheme for eligible staff if you do not already offer one. Use The Pensions Regulator’s tool for employers to find out what you need to do and when you need to do it. If you already have a workplace pension scheme that you’d like to use for automatic enrolment, you must ask the provider if it meets the rules. How much you must pay You must pay at least 3% of your employee’s ‘qualifying earnings’ into your staff’s pension scheme. Check the pension scheme you’re using to find out what counts as ‘qualifying earnings’. Under most schemes, it’s the employee’s total earnings between £6,240 and £50,270 a year before tax. Total earnings include: salary or wages bonuses and commission overtime Statutory Sick Pay statutory maternity, paternity or adoption pay Paying contributions You must deduct contributions from your staff’s pay each month. You’ll need to pay these into your staff’s pension scheme by the 22nd day (19th if you pay by cheque) of the next month. You must pay your contributions for each employee by the date you’ve agreed with your provider every time you run payroll. You must backdate any missed payments. You may be fined if you pay late or do not pay the minimum contribution for each member of staff.

Manage your workplace pension scheme

When you’ve set up a workplace pension scheme, you must: check if and when staff should be re-enrolled manage requests to join and leave your pension scheme keep records about how you’ve met your legal duties check if existing staff should be added to your pension scheme, for example when they earn a certain amount Re-enrolment and re-declaration You must re-enrol staff into your pension scheme by your re-enrolment date if they: left your pension scheme more than 12 months before that date are still in your pension scheme but pay below the minimum contributions level Your re-enrolment date is 3 years after your first member of staff starts working for you, and then every 3 years after that. If staff left your pension scheme 12 months or less before your next re-enrolment date, and are still eligible, you can choose to either: re-enrol them on that date wait until the next re-enrolment date 3 years later You must write to eligible staff within 6 weeks after your re-enrolment date to tell them you have put them back into your pension scheme. Use The Pensions Regulator’s tool to check what you need to do . You must complete a re-declaration of compliance every time you carry out your re-enrolment duties, even if staff were not re-enrolled. If you do not complete the re-declaration on time you could be fined. Requests to join or leave your pension scheme All staff can request to join your pension scheme if they want to. You must check they are eligible and put them into the scheme within 1 month of getting their request. Staff can leave your pension scheme whenever they want. You must take them out of the scheme within one month of getting their request. If staff ask to leave your pension scheme within 1 month of joining (known as the ‘opt-out window’), you will have to refund their contributions within 1 month. If they ask to leave after the opt-out window, their contributions will be kept in their pension until they retire. Keep records You must keep records of how you’ve met your legal duties for maintaining your pension scheme, including: the names and addresses of staff enrolled when contributions are paid in all requests to join or leave your pension scheme your pension scheme reference or registry number ( PSR ) You must keep these records for 6 years except for requests to leave your pension scheme which must be kept for 4 years. You must also keep track of the ages and earnings of staff so you can enrol them when they become eligible.

Set up and manage a workplace pension scheme

Employers and eligible staff

Employers have to provide a workplace pension scheme for eligible staff as soon as their first member of staff starts working for them (known as your ‘duties start date’).

You’re usually an employer if you deduct tax and National Insurance contributions from an employee’s wages.

Who you must enrol

You must enrol and make an employer’s contribution for all staff who:

are aged between 22 and the State Pension age
earn at least £10,000 a year
normally work in the UK (this includes people who are based in the UK but travel abroad for work)

If staff become eligible because of a change in their age or earnings, you must put them into your pension scheme and write to them within 6 weeks of the day they meet the criteria.

If you’re not sure what the State Pension age is you can use the State Pension age calculator to find out.

View a printable version of the whole guide

Step 1 Check that you’re taking on someone as an employee
Follow these steps if you want to take on someone with the employment status of ‘employee’ for the first time.
1. Check who counts as an employee
The rules are different if you want to take on someone with another type of employment status, such as agency staff, freelancers, consultants and contractors.
1. Check your responsibilities when you take on someone with a different employment status and contract type
and Check you can afford to take on employees
Step 2 Make your workplace safe and accessible for employees
Step 3 Register as an employer and set up PAYE
You need to register with HMRC so you can pay tax and national insurance for your employees.
Step 4 Check your responsibilities around workplace pensions
1. Understand your pension responsibilities as an employer
Step 5 Get Employers' Liability insurance
1. Find out about Employers' Liability insurance
Step 6 Recruit and employ someone
1. Employ someone

Set up and manage a workplace pension scheme

Employers and eligible staff

Who you must enrol

Step 1 Check that you’re taking on someone as an employee

and Check you can afford to take on employees

Step 2 Make your workplace safe and accessible for employees

Step 3 Register as an employer and set up PAYE

Step 4 Check your responsibilities around workplace pensions

Step 5 Get Employers' Liability insurance

Step 6 Recruit and employ someone

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Set up and manage a workplace pension scheme

Employers and eligible staff

Who you must enrol

Part of Get ready to employ someone for the first time: step by step

Step 1: Check that you’re taking on someone as an employee

and Check you can afford to take on employees

Step 2: Make your workplace safe and accessible for employees

Step 3: Register as an employer and set up PAYE

Step 4: Check your responsibilities around workplace pensions

Step 5: Get Employers' Liability insurance

Step 6: Recruit and employ someone

Is this page useful?

Help us improve GOV.UK

Help us improve GOV.UK

Step 1 Check that you’re taking on someone as an employee

Step 2 Make your workplace safe and accessible for employees

Step 3 Register as an employer and set up PAYE

Step 4 Check your responsibilities around workplace pensions

Step 5 Get Employers' Liability insurance

Step 6 Recruit and employ someone