Set up and manage a workplace pension scheme

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 2% of your employee’s ‘qualifying earnings’ into your staff’s pension scheme. This will rise to 3% in April 2019.

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 £6,032 and £46,350 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.