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Who needs to be enrolled?

To check if your client needs to enrol staff into a pension scheme that can be used for automatic enrolment, it’s important your client carries out a preliminary assessment of their staff to work out who to put into the pension scheme. The assessment can either be done manually or automatically using business software and will need to be carried out each time the workforce changes. Read about checking payroll software supports automatic enrolment.

If your client has business software (eg for payroll, HR and pensions administration), this could be set up to automatically assess and monitor staff ages, earnings and pension contributions paid into a pension scheme by a member of staff and/or your client. If they don’t, the table below shows how to assess staff based on their ages and how much they earn.

Monthly gross earnings Age Weekly gross earnings
From 16 to 21 From 22 to SPA* From SPA to 74
£503 and below Has a right to join a pension scheme 1 £116 and below
Over £503 up to £833 Has a right to opt in 2 Over £116 up to £192
Over £833 Has a right to opt in Must be enrolled 3 Has a right to opt in Over £192

Figures correct as of 2018/2019. *SPA = state pension age

1 Has a right to join a pension scheme
If they ask, the employer must provide a pension scheme for them, but the employer doesn’t have to pay contributions into a pension scheme.

2 Has a right to opt in
If they ask to be put into a pension scheme, the employer must put them in a pension scheme that can be used for automatic enrolment and pay regular contributions.

3 Must be enrolled
The employer must put these members of staff into a pension scheme that can be used for automatic enrolment and pay regular contributions. The employer doesn't need to ask their permission. If a member of staff gives notice, or the employer gives them notice, to leave employment before the employer has completed this process, the employer has a choice whether to enrol them or not. The employer also has a choice whether to enrol a director who meets these age and earnings criteria.

When to enrol and pay contributions into a pension scheme

On the date your client's duties begin they must carry out a full assessment of all their staff.

After their duties come into effect, your client’s staff (including those on variable pay, flexible pay, irregular hours, etc) should be enrolled the first time they earn over the automatic enrolment threshold of £192 a week or £833 per month if paid monthly.

Once staff have been enrolled, the employer must pay regular contributions into their pension scheme. If the staff member's earnings fall below £116 per week or £503 per month, the employer may stop paying contributions unless the rules of the pension scheme they have enrolled into require them to continue. You should check with the pension scheme what their rules are.

Bonus payment

If a bonus is paid and pushes the member of staff’s earnings over the automatic enrolment threshold amount in that specific pay period, they would need to be enrolled in that same week or month. The detailed guidance below has in-depth information about this or read our page on employing staff on irregular hours or incomes.

For more information on contributions see working out your client’s costs.

Opting out, opting in and joining a scheme

It's against the law to try and persuade staff to opt out of (or leave) a pension scheme.

If your client doesn’t have anyone to enrol, they'll still have other duties, which are outlined throughout this guide.

Read assessing and enrolling staff for more information on opting out, opting in and joining a scheme.

What if my client doesn't have any staff other than directors?

Your client won’t have any automatic enrolment duties if any of the following apply:

  • they are the sole director
  • the only people working for them are a number of directors, none of whom have an employment contract
  • the only people working for them are a number of directors, only one of whom has an employment contract

Automatic enrolment will apply if more than one director has a contract of employment. In this case, if your client does have automatic enrolment duties for a director, and the director meets the age and earnings criteria above, your client is not required to automatically enrol them unless your client chooses to do so.

Full details on the circumstances in which directors are exempt from automatic enrolment can be found on director exemptions from automatic enrolment.

For more information on what to do if your client is not an employer, go to what if I don't have any staff?

There may be other circumstances where an employer may not have any duties. You can find more information about employment contracts by visiting employment status (GOV.UK).

What letters are sent to my clients from TPR?

The Pensions Regulator (TPR) sends out letters and emails to employers to support them with their automatic enrolment duties. These letters form a series of communications which are sent to your clients during the automatic enrolment process, helping them to understand their duties and guiding them through what to do next.

You may find it useful to familiarise yourself with these, to help your clients understand what do to and by when.

Advanced guidance

These resources may help if you have more detailed questions on the above:

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Your client's staff are likely to have heard about automatic enrolment through the media and will probably want to know how the changes will affect them.

Key points

  • There's more your client can do to help their staff understand automatic enrolment into a workplace pension than simply providing them with the written communication required by law.
  • The employer is an important and effective channel of communication for their staff throughout the automatic enrolment process – your clients may ask you to help them raise awareness about the changes.
  • A range of key messages across a number of channels works best – keep them short and simple.

Key messages to communicate to staff

  • The message about employer and government contributions into a pension scheme gains attention, as do facts and figures. Read the Department for Work and Pension's key messages.
  • Messages around why saving for retirement is important can help engage staff with the subject of workplace pensions.
  • Staff appreciate an explanation of what automatic enrolment means for them. For example, information about how much they'll contribute and when.
  • Details of where staff can find out more, either from their employer or in the workplace and personal pensions information on GOV.UK are helpful.

There are a number of ways these messages can be communicated. A few examples are below.

Online articles

Intranet or newsletter articles can be used at various times. Use any or all of the text in the examples, keep them short, and explain where to find out more. Read news in brief (RTF, 11.5kb, 1 page) for suggestions on what to put on your client’s intranet or in a newsletter. You can find more comprehensive content in the intranet article (RTF, 204kb, 2 pages) or newsletter article (RTF, 29.2kb, 2 pages).

Text or email

Text messages or emails are quick ways of letting staff know when automatic enrolment is happening for them. Read the suggestions for text and email alerts (RTF, 38kb, 1 page). If email is used, there is a risk that the server may file it into the ‘junk email’ folder, so don’t rely solely on email as a method of communication.

Automatic enrolment duties apply to any staff that are aged 22 to state pension age and earn over £192 a week or £833 a month; they must be put into a pension scheme which your client must contribute towards.

Automatic enrolment duties also apply to your client even if they employ; short-term, seasonal, temporary or other staff who are not on regular hours or incomes, who might not at first meet the above criteria, but your client pays them through a payroll.

Do the duties apply to your client?

Even if your client employs short-term, seasonal, temporary staff or other staff who are not on regular hours or incomes (eg fruit pickers, labourers, etc) and they pay them through a payroll, then automatic enrolment duties will apply to them.

Who does your client need to enrol?

From your client’s duties start date, they must assess their staff to work out who to put into a pension scheme that can be used for automatic enrolment based on their ages and how much they earn. Even if the number of people your client employs varies, or they have fluctuating hours and pay, your client must assess them individually each time they run their payroll.

For more information, see the table on checking who to enrol.

When to enrol and pay contributions for staff that work irregular hours or earn flexible incomes

After your client’s duties start date, staff who work irregular hours or earn flexible incomes should be enrolled the first time they earn over the automatic enrolment threshold of £192 a week or £833 per month if paid monthly.

Once staff have been enrolled, the employer must pay regular contributions into their pension scheme. If the staff member's earnings fall below £116 per week or £503 per month, the employer may stop paying contributions unless the rules of the pension scheme they have enrolled into require them to continue. You should check with the pension scheme what their rules are.

What if your client is an employment agency?

If your client is an employment agency supplying staff to other businesses and they are responsible for paying these staff, the agency is the employer and is responsible for fulfilling the automatic enrolment duties relating to these staff.

Which pension scheme should your client choose?

If your client already has a pension scheme for their staff, they should check they can use it for automatic enrolment by contacting their provider. If they can’t, they’ll need to choose a new scheme.

Your client should carefully consider which scheme is best for them and their staff. One thing that a lot of employers with temporary staff have in common is that some of their staff have English as a second language. The pension scheme may offer the option of translating the letters they issue to staff.

Find more information on step Choosing a pension scheme.

What is available to help your client?

Delay working out who to put into a pension scheme

If your client has temporary or short-term staff who won’t be working for them for longer than three months they may decide to postpone assessing them. Your client will not be required to put them into a pension scheme or make contributions to the scheme during the postponement period unless they expressly ask to be put into a scheme.

At the end of the postponement period, your client must enrol any staff who are still working for them if they meet the age and earnings thresholds.

Find more information about postponement.

Use payroll software that supports automatic enrolment

If your client has transient staff with fluctuating earnings then having the right payroll software can really help. Most software will automatically assess staff at each pay cycle, calculate contributions where necessary, and some also have a postponement function built into it, so it’s important to find the right software that meets your client’s needs.

For more information, see the Checking records and payroll processes.

Example scenarios

In some cases directors may be exempt from duties under automatic enrolment, even if they have an employment contract. This is because in these cases the director is not classed as a worker.

Only organisations that employ workers have duties under automatic enrolment.

What is the definition of a director?

When referring to a director, we mean anyone holding office as a director. This does not include a person who is a director in name only.

In the case of a company, it means a director formally appointed under the Companies Act 2006, and also anyone acting as a director in the sense of having a decision-making role in the corporate governance of the company, even if they have not been properly appointed.

In the case of corporate bodies other than companies, it means anyone holding an office of director created by the establishing legislation or Royal Charter.

When is a director regarded as a worker?

A director is only a worker for automatic enrolment purposes if:

  • they have a contract of employment with the organisation
  • at least one other person (who can be another director) also has a contract of employment with the organisation

A contract of employment does not have to be written down anywhere, it could also be either a verbal or implied contract.

However, if there is no written contract of employment, or other evidence of an intention to create an employer/worker relationship between the company and a director or directors, we will not seek to argue that an implied contract of employment exists.

You can find more information about employment contracts on the employment status section of the GOV.UK website.

If an individual is a director of one company and works for another company as an ordinary member of staff, they will still be a worker as far as the second company is concerned, even if they are not a worker in respect of the first company because they are a director.

Directors without an employment contract

If a director does not have an employment contract, they cannot be a worker and are therefore always exempt from automatic enrolment.

This means that an organisation with one or more directors who do not have contracts of employment is not an employer if it does not have any staff other than the director(s).

The company will have no automatic enrolment duties and does not need to complete a declaration of compliance. In this case they should let us know that they're not an employer.

If the organisation does have other staff, it has duties in respect of those other staff and is an employer. If none of the other staff meet the age and earnings criteria for automatic enrolment, the company still has to complete a declaration of compliance.

If the company's circumstances change so that automatic enrolment duties apply, they'll need to inform us of this as soon as possible. For example if they took on a member of staff other than a director, or if at least two directors started working for them under contracts of employment.

Directors with an employment contract where there are no other members of staff

Even if a director does have a contract of employment, they are not classed as a worker if they are the only person in the company with an employment contract.

A one person company consisting of a single director is never considered an employer under automatic enrolment, whether the director has an employment contract or not.

This would be true even if there were other members of staff, such as other directors, as long as none of the other staff were working under employment contracts.

The director exemption from automatic enrolment only applies for the work they carry out for that company.

A one person company with a sole director will not need to complete a declaration of compliance and should tell us that they're not an employer.

Where a company has multiple directors and no other staff - and at least two of the directors have employment contracts - all the directors with employment contracts will be workers and subject to the automatic enrolment duties - and all those directors without employment contracts will not be.

If the company's circumstances change so that automatic enrolment duties apply, they'll need to inform us of this as soon as possible (for example if they took on another member of staff under a contract of employment).

Organisations whose staff are all exempt

If the organisation has no workers, because all their staff are exempt, they will not need to complete a declaration of compliance.

If the organisation has received a letter from us saying they have a duties start date, then they should let us know they are not an employer by completing our online form.

Please note that if there are staff who simply do not meet the age and earnings criteria for automatic enrolment but the exemptions do not apply, they do have legal duties and will need to complete a declaration of compliance.

If the company's circumstances change so that automatic enrolment duties apply, they'll need to inform us of this as soon as possible. For example if they took on a member of staff other than a director, or if at least two directors started working for them under contracts of employment.

When director-only organisations start to have duties

The organisation will start to have duties as soon as they become an employer for the first time, which is when they take on a new member of staff (whether a director or not) with an employment contract. If only new directors are taken on and they do not have contracts of employment, they are not classed as workers and would not trigger duties.

In the case of directors who are classed as workers, provided it has no other non-director staff, the organisation can choose whether to put them in a pension scheme or not. If the organisation chooses not to, it has to complete a declaration of compliance saying that it has not put any workers into a scheme.

Where an organisation has two directors - one with a contract of employment, and one without - the organisation will not be classed as an employer and will not have duties under automatic enrolment.

The moment this organisation takes on a new member of staff that has a contract of employment, the organisation will be classed as an employer and duties will be triggered.

The duties start date in this case would be the date the director with the employment contract began employment. However, at that time the organisation was exempt from the duties and not classed as an employer, therefore the duties are to be given effect from the date the second worker with the contract of employment started working for the organisation.

Other office-holders

The special rules for directors do not apply to other office-holders, such as trustees or company secretaries

These office-holders will be classed as workers and subject to the automatic enrolment duties if they have an employment contract with the organisation.

If they have no employment contract and only perform the duties of their office, they are not a worker and are exempt.

Where an office holder does have a contract of employment, it may not cover all of the work that they do for the company.

For example, a company secretary's contract might cover additional administrative services that they provide to the company, but not their official duties as company secretary. In this situation, the office-holder is classed as a worker, but only their income under the employment contract is counted for automatic enrolment purposes.

Married couples and civil partners

There are no special rules for directors who are married or in a civil partnership, as the duties are not affected by any family relationships.

If the only people working for the company are a married couple or civil partners and both are directors, they will both be workers if they both have contracts of employment with the company. If only one of them has an employment contract, or neither of them does, then neither of them will be workers and the company will not be an employer.

In the case of a company where one spouse or civil partner is the director and the other holds the office of company secretary (please note this is not the same as simply performing general secretarial work, which would not be exempt), exemption from automatic enrolment will depend on whether contracts of employment are held by each spouse or civil partner.

A number of different circumstances might arise, for example:

  • if both are directors and neither has a contract of employment, both will be exempt
  • if both are directors and one has a contract of employment but the other does not, both will be exempt
  • if one is a director and the other is not, and both have contracts of employment, the one who is a director will be exempt but the one who is not a director will not be exempt (depending on their age and earnings, they may qualify for automatic enrolment and need to be put into a pension)
  • if both have contracts of employment, neither is exempt and the company will have duties for both of them, even for a spouse or civil partner who is a director (although the company can choose not to automatically enrol a director - see below)
  • if one holds the office of company secretary but is not a director, they are only exempt if they do not have a contract of employment (for example, because they only perform the official duties of their office, such as submitting the annual return to Companies House)
  • if the company secretary has a contract of employment, they would not be exempt even if the contract only applies to additional work that they do over and above their official responsibilities

When you can choose whether or not to automatically enrol someone

There are some cases where an employer can decide whether or not to put someone in a pension scheme, if the member of staff has triggered automatic enrolment or re-enrolment, including people who:

  • are directors who are working under an employment contract, where there is at least one other worker working for the organisation under an employment contract
  • are in their notice period
  • have ceased active membership of a pension which is approved for use with automatic enrolment within the previous 12 months
  • are partners of limited liability partnership (LLP) companies, but are not salaried members under HMRC tax rules
  • have HMRC tax protected status

Whether or not they choose to automatically enrol any of these workers, the employer will need to communicate to them - and they will still need to make a declaration of compliance.

However, these individuals do have the right to opt in or join a pension scheme at any time and, if they do so, the employer cannot refuse to enrol them (except in the case where the employer has chosen to exclude people in their notice period, as these people lose the right to opt in or join).