Workplace pensions are a way of employees saving for retirement that’s arranged by your employer.

A percentage of your employees pay is put into the pension scheme automatically every payday and you also add into the pension scheme.

All employers must provide a workplace pension which is called ‘automatic enrolment’.

Enrolment

As an employer you must automatically enrol your employees into a pension scheme and make contributions to their pension if all the following apply:

• They’re classed as a ‘worker’
• They’re aged between 22 and state pension age
• They earn at least £10,000 per year
• They usually work in the UK

You usually do not have to automatically enrol your employees if they do not meet the previous criteria or if any of the following apply:

• They’ve already given notice to your employer that you’re leaving your job, or they’ve given you notice
• They have evidence of your lifetime allowance protection (for example, a certificate from HMRC)
• They’ve already taken a pension that meets the automatic enrolment rules and your employer arranged it
• They get a one-off payment from a workplace pension scheme that’s closed (a ‘winding up lump sum’), and then leave and rejoin the same job within 12 months of getting the payment
  more than 12 months before your staging date, they left (‘opted out’) of a pension arranged through your employer
• They’re from an EU member state and in an EU cross-border pension scheme
• They’re in a limited liability partnership
• They’re classed as a ‘director’ without an employment contract and employ at least one other person in your company

Your employees can usually still join the pension if they want to, and you can’t refuse.
If your employees earn the below amounts or less, you don’t have to contribute to their pension:

• £520 a month
• £120 a week
• £480 over 4 weeks

When you enrol employees you must provide your employees with a letter to tell them they have been enrolled to the workplace pension. You must tell them:

• The date you enrolled them
• The type of pension scheme and provider
• How much contributions will be made by them and the employer
• How to opt out of the scheme if they want to
• How tax relief applies to them

Contributions

Most workplace pensions contributions are the legal minimum amount which is:

Employer pays – 3%

Employee pays – 5%

Total Contribution – 8%

If you have a payroll scheme set up with ourselves, we will automatically let your employees know if they meet the criteria or don’t for a pension scheme. They can they choose to opt out or stay in the scheme. Our software will then calculate their pension contributions each week/month and they will be able to see this on their payslips.