Employers will have to provide a workplace pension for eligible staff by 2018. This is called ‘automatic enrolment’.
Find out when you’ll need to start enrolling people - it depends how many people are on your payroll. This is known as your ‘staging date’.
Check you’re an employer
You’re usually an employer if you deduct tax and National Insurance contributions from an employee’s wages.
Check you’re an employer if you’re unsure what your duties are, eg you have a carer or employ someone to work in your home.
Employees who qualify for a workplace pension
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
- work in the UK
You don’t have to enrol an employee if they give you proof of their lifetime allowance protection.
How to set up a pension scheme
You must set up a workplace pension scheme, if you don’t already offer one.
Use The Pensions Regulator’s Duties Checker to find out what you need to do and when you need to do it.
If you already have a workplace pension scheme, you must ask the provider if it meets the automatic enrolment rules.
How much you must pay
You must pay at least 1% of your employee’s ‘qualifying earnings’ into your workplace pension. This will rise to 3% in 2019 if approved by Parliament.
You can work out ‘qualifying earnings’ as either:
- the amount an employee earns before tax between £5,824 and £43,000 a year
- their entire salary or wages before tax
You must deduct contributions from your staff’s pay each month. You’ll need to pay these into your staff 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.
You may be fined by The Pensions Regulator if you pay late or don’t pay the minimum contribution for each member of staff.