Set up a workplace pension scheme - small employer checklist

Who this page is for

This page is for UK employers setting up a workplace pension because they are taking on staff — small limited companies, shops, agencies, professional firms and anyone else who now has to run automatic enrolment.

It is not a guide for an employee deciding whether to opt out. For that, see Auto-Enrolment Opt-Out.

By law, you have to provide a workplace pension for eligible staff as soon as your first member of staff starts working for you. The Pensions Regulator calls that moment your duties start date.

The setup sequence

For a small employer, the clean sequence is:

1. Confirm your duties start date.
2. Choose a pension scheme set up for automatic enrolment.
3. Work out who must be put into the scheme.
4. Connect payroll and contributions.
5. Write to each member of staff.
6. Declare compliance to The Pensions Regulator.
7. Keep up the ongoing duties, including re-enrolment.

The order matters. Leave the scheme choice or payroll setup until after the first pay run and you create backdated contribution work for yourself immediately.

1. Confirm your duties start date

Your duties start date is the day your first member of staff starts working for you. Automatic enrolment is a legal duty, and employers can be fined for not acting in time.

For new employers, this has replaced the old idea of waiting for a staging date. The question is no longer "when will the regulator write to me?" — it is "when did my first staff member start?"

If you are not sure whether someone counts as staff, use The Pensions Regulator's employer tools and keep the evidence. Do it before payroll becomes routine.

2. Choose a pension scheme

Choose a scheme that is set up for automatic enrolment, and start early — it can take longer than you expect.

When comparing schemes, check:

• whether the scheme accepts all the staff you need to enrol;
• employer and member charges;
• whether it works with your payroll process;
• how tax relief works for your staff;
• how contribution files are uploaded or connected;
• how opt-ins, opt-outs and refunds are handled;
• what records and reports the scheme gives you.

The Pensions Regulator lists some schemes on its website but is explicit that it cannot recommend or endorse any particular scheme or organisation. Treat any provider list as a starting point for due diligence, not a recommendation.

If an accountant, payroll bureau or adviser helps, you as the employer still need to understand what has been chosen and why.

3. Work out who must be put into the scheme

On your duties start date, you must assess your staff by age and earnings.

Staff must normally be put into an automatic-enrolment pension scheme if they are:

• aged from 22 up to State Pension age;
• earning over £10,000 a year, or £833 a month, or £192 a week;
• working in the UK.

Staff outside those age and earnings criteria may still have the right to join or opt in, and you still have communication duties even where no one has to be automatically enrolled.

The auto-enrolment checker can help frame the categories, but use The Pensions Regulator's employer guidance for the final payroll decision.

4. Connect payroll and contributions

Payroll is where many small employers trip up. You need a process that:

• assesses staff at the right time;
• deducts the correct staff contribution;
• adds the employer contribution;
• submits contribution data to the pension scheme;
• pays contributions by the required deadline;
• records opt-outs, opt-ins and postponement notices.

By law, the minimum automatic-enrolment contribution is 8% of the member of staff's qualifying earnings, of which the employer must pay at least 3%. On the minimum basis for the 2026/27 tax year, qualifying earnings run from £6,240 to £50,270 a year.

These figures are reviewed each year, so payroll should never rely on an old article or spreadsheet. Use current payroll software, your scheme's contribution rules and The Pensions Regulator's official contribution guidance.

5. Write to staff

You must write to each member of staff individually within 6 weeks of your duties start date, explaining how automatic enrolment applies to them.

This covers both the staff being automatically enrolled and the staff who are not being put into a scheme. The Pensions Regulator provides letter templates, including separate ones for staff you are postponing.

Do not make the letter sound as though you would prefer staff to opt out. Opting out has to be the worker's own choice, not employer-led cost control.

6. Declare compliance

Your declaration of compliance must be completed within 5 months of your duties start date.

You will usually need:

• your PAYE reference;
• your TPR letter code or accounts office reference number;
• pension scheme details;
• staff assessment information;
• contribution and payroll details.

Even if an accountant, payroll bureau or adviser completes the declaration for you, it remains your legal duty to make sure it is done on time and correctly.

7. Keep up ongoing duties

Setup is not the end of automatic enrolment. Ongoing duties include:

• assessing new staff, and existing staff whose age or earnings change;
• paying staff and employer contributions correctly;
• keeping pension records;
• handling opt-outs and opt-ins;
• updating your contact details with TPR;
• re-enrolling eligible staff who have left the scheme when required.

Every three years you must put certain staff who have left the pension scheme back into it and complete a re-declaration of compliance — even if there is no one to put back.

Common small-employer mistakes

The avoidable mistakes are predictable:

• waiting until the first payroll run before choosing a scheme;
• assuming the accountant owns the legal duty;
• choosing a scheme that does not connect cleanly with payroll;
• using old qualifying-earnings thresholds;
• missing the 6-week staff-letter deadline;
• missing the 5-month declaration deadline;
• failing to backdate missed contributions when setup is late;
• encouraging staff to opt out, directly or indirectly.

The lowest-risk approach is to treat automatic enrolment as a payroll compliance workflow, not a one-off HR form.

Where to go next

If you are trying to understand the employee side, start with Workplace Pensions.

If you are weighing the cost of opting out as a worker, read Auto-Enrolment Opt-Out.

If you are a director setting up pension contributions through a limited company, read Pensions Through a Ltd Company.

This page is factual employer information, not legal, payroll, tax or financial advice. It does not recommend a pension provider, payroll product or adviser.