What are a startup's pension auto-enrolment duties?
By SuLe · Updated 28 June 2026
Auto-enrolment duties begin the day you employ your first member of staff: you must assess your workers, automatically enrol eligible jobholders into a qualifying pension, contribute at least 3%, and send a declaration of compliance to The Pensions Regulator. There is no exemption for being small or new — the duties apply from employee number one.
Key facts
- Pension duties start the day the first staff member is employed — there is no small-employer grace period.
- Eligible jobholders (aged 22 to State Pension age, earning over £10,000/year on 2025/26 figures) must be auto-enrolled; check current thresholds on gov.uk.
- Minimum contribution is 8% of qualifying earnings, with at least 3% from the employer (2025/26); verify the current figures.
- Qualifying earnings sit in a band (£6,240–£50,270 for 2025/26) — check the current band on gov.uk.
- You must send a declaration of compliance to The Pensions Regulator, generally within five months of duties starting.
When do auto-enrolment duties begin?
Immediately. Your legal duties start on the day you first employ someone — the "duties start date" — not once you reach a certain size or age of company.
Founders often assume pensions are a big-company problem. They are not: from your first employee you must work out who is eligible, put a qualifying workplace pension in place, and begin contributions. The obligation sits alongside the other first-hire duties like PAYE and employers' liability insurance.
You also have a reporting duty. A declaration of compliance must be sent to The Pensions Regulator, generally within five months of your duties starting, confirming you have met your obligations. Missing it can lead to penalties even where you enrolled staff correctly.
Who must I enrol, and how much do I pay?
You must automatically enrol "eligible jobholders": staff aged 22 up to State Pension age who earn over the earnings trigger — over £10,000 a year on 2025/26 figures. Workers outside those bands have rights to opt in, sometimes with an employer contribution.
The minimum total contribution is 8% of qualifying earnings, of which at least 3% must come from you as the employer, on 2025/26 figures. Qualifying earnings are a band — £6,240 to £50,270 for 2025/26 — so contributions are calculated on earnings within that range, not the whole salary.
All of these figures are reviewed regularly and can change each April, so treat the numbers here as a snapshot and check the current thresholds, band and percentages on gov.uk before configuring payroll.
What about opt-outs and ongoing duties?
Auto-enrolment is not a one-off. Eligible staff must be enrolled first, but they can then choose to opt out, usually within a defined window, and receive a refund of what they have paid in.
Crucially, you cannot induce or encourage anyone to opt out — doing so is a breach. You simply enrol eligible staff and let them decide. If someone opts out and later becomes eligible again, or if new staff join, you assess and enrol them too.
The duties also recur. You must periodically re-enrol eligible staff who previously opted out — broadly every three years — and complete a re-declaration of compliance. Building assessment into each payroll run keeps you continuously compliant rather than scrambling later.
| Duty | Requirement (2025/26 figures — verify) |
|---|---|
| Duties start | Day you employ your first staff member |
| Who to enrol | Aged 22 to State Pension age, earning over £10,000/yr |
| Minimum contribution | 8% of qualifying earnings, ≥3% from employer |
| Qualifying earnings band | £6,240–£50,270 |
| Declaration of compliance | To The Pensions Regulator, generally within 5 months |
| Re-enrolment | Broadly every 3 years |
Worked example
Oliver runs a hardware startup and takes on his first two employees. On his duties start date he sets up a qualifying workplace pension scheme through a provider and assesses both hires.
One employee, aged 34 earning £42,000, is an eligible jobholder, so Oliver auto-enrols her and sets contributions on her qualifying earnings within the band — at least 3% from the company. The other, a 19-year-old part-timer earning under the trigger, is not automatically eligible but can opt in. Oliver diarises the declaration of compliance to The Pensions Regulator well inside the five-month window, and checks the current rates on gov.uk before finalising payroll.
Where founders go wrong
Thinking pensions only apply to bigger teams
— duties start from your very first employee, with no small-employer exemption.Missing the declaration of compliance
— enrolling staff is not enough; you must also tell The Pensions Regulator, generally within five months.Encouraging staff to opt out
— that is unlawful; you must enrol eligible staff and let them choose freely.Using stale figures
— thresholds, the band and percentages change; confirm the current numbers on gov.uk each year.
Related questions
When do auto-enrolment duties start?
The day you employ your first member of staff. There is no grace period for being small or new — from your first worker you must assess them, enrol anyone eligible, set up contributions, and send a declaration of compliance to The Pensions Regulator, generally within five months.
Who must I automatically enrol?
Eligible jobholders: staff aged 22 up to State Pension age who earn over the earnings trigger (over £10,000 a year on 2025/26 figures). Others can ask to opt in. Check the current thresholds on gov.uk, as the figures are reviewed regularly.
How much do I have to contribute?
The minimum total contribution is 8% of qualifying earnings, with at least 3% coming from the employer, on 2025/26 figures. Qualifying earnings are a band (£6,240 to £50,270 for 2025/26). Check the current percentages and band on gov.uk before setting up payroll.
Can an employee opt out?
Yes. You must still auto-enrol eligible staff, but they can choose to opt out, usually within a set window, and get a refund of their contributions. You cannot encourage them to opt out, and you must re-enrol eligible staff periodically — roughly every three years.
Auto-enrolment is easy to underestimate and comes with hard deadlines and penalties from your first hire, on top of figures that change every year. A SuLe solicitor can make sure your first-hire duties — pension, PAYE, insurance and contract — are all covered. Book a free consultation about your contracts and stay compliant from day one.
Keep reading: How do I hire my first employee in the UK (legal checklist)? · What must a UK employment contract include? · Do startups need an employee handbook or staff policies? · What notice period should startup employment contracts use? · How do probation periods work legally in the UK?
Primary sources: GOV.UK — Workplace pensions: what employers have to do · GOV.UK — Employment contracts
