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Auto-Enrolment: What is it and who to enrol?
Auto-Enrolment: What is it and who to enrol?

This article will help you understand what auto-enrolment is and who needs to be auto enrolled in to a workplace pension scheme.

Rebecca Russell avatar
Written by Rebecca Russell
Updated over a week ago

What is auto-enrolment?

With effect from April 2012, employers have an obligation to provide a workplace pension and to enrol all eligible employees into the scheme. This process is called 'automatic enrolment'.

An employer's pension automatic enrolment duties begin the first day that their first employee starts work. From this date onwards, the employer must provide a workplace pension scheme and enrol all eligible staff. You can have multiple pension schemes for your employees.
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It is automatic because you must enrol the employee even if you know your employee does not want to be part of the workplace pension scheme. They then have to leave the scheme and will receive a full refund of any contributions if they leave the scheme within the first month. This is called opting out.

Who to Enrol?

Understanding definitions and employee categories are important when considering who needs to be enrolled into your workplace pension scheme:

Workers - these are employees who are under contract to perform a job exclusive of those who work as part of their own business

Jobholder - these are workers who are between 16 and 74 years old, working / ordinarily working in the UK under their contract and have qualifying earnings

For the purposes of auto-enrolment, employees fall into 3 categories:

  • Eligible job holder

  • Non-eligible job holder

  • Entitled worker

It is an employer's duty to enrol anyone who falls into an 'eligible job holder' category into the workplace pension.

An eligible job holder will:

  • Earn over £833.33 per month (£10,000 per year, or £192 per week).

  • 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 a qualifying pension scheme and inform them within 6 weeks of the day they meet the criteria. The pension scheme contribution must be a minimum of 8%, with at least 3% contributed by the employer.

A non-eligible job holder will:

  • Not be automatically enrolled

  • Be able to request to be enrolled in to the pension scheme

If a non-eligible job holder asks to be enrolled in to the workplace pension, you must do so and you must contribute the minimum 3% employer contributions if the employee's earnings are over £512.00 per month.

If an employee's earnings are less than £512.00 per month, they can contribute whatever percentage they choose but an employer does not have to contribute.

An entitled worker will:

  • Be between 16 and 74 years old.

  • Be working / ordinarily working in the UK under their contract.

  • Not have qualifying earnings

Still unsure?

Don't worry! The Payfit app will automatically assess your employees' eligibility and let you know when it is time to auto-enrol a new employee.

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