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Workplace Pensions: What You Need to Know as a PAYE-Registered Employer

If your business is registered for PAYE and you run a payroll—even if you only have one employee—you will receive correspondence from The Pensions Regulator. This is part of your legal obligation under the Pensions Act 2008, which introduced automatic enrolment for workplace pensions.

Here’s what you need to know:

What Is Automatic Enrolment?

Automatic enrolment means that employers must:

  • Enrol eligible staff into a qualifying workplace pension scheme.

  • Make contributions to their pensions.

  • Inform staff about how the scheme works.

  • Complete a Declaration of Compliance with The Pensions Regulator.

This applies to all employers, including small businesses, sole traders with employees, and even those with just one staff member.

Who Needs to Be Enrolled?

You must automatically enrol employees who:

  • Are aged 22 to State Pension age.

  • Earn more than £10,000 per year.

  • Work in the UK.

Other staff may still have the right to opt in or join a pension scheme, even if they don’t meet the criteria for automatic enrolment

What Happens After You Register for PAYE?

Once you register for PAYE and begin employing staff:

  • The Pensions Regulator will send you a letter with a letter code and PAYE reference.

  • You must assess your workforce to determine who needs to be enrolled.

  • You must choose a qualifying pension scheme.

  • You must complete a Declaration of Compliance within 5 months of your duties start date.

Even if no employees are eligible for automatic enrolment, you still need to complete the declaration to confirm you’ve met your duties.

Declaration of Compliance: What Is It?

This is a legal requirement that tells The Pensions Regulator how you’ve met your duties. You can complete it online using your letter code and PAYE reference. If you miss the deadline, you may face fines or enforcement action

You can start the process here:

Ongoing Duties

After completing your declaration, you must:

  • Continue assessing staff eligibility.

  • Make pension contributions on time.

  • Re-enrol eligible staff every three years.

  • Keep records of your pension activities.

If you’re unsure about your duties or need help setting up a pension scheme, please reach out. We’re here to support you through every step of the process.

Don’t ignore pension regulator correspondence. Send it to us if you are unsure.

Annja Louca2025