Do I have to put my staff into a workplace pension?

Auto-enrolment has applied to every UK employer since 2012 and there is no grace period for a new one — your duties start on the day your first member of staff begins work. The Pensions Regulator polices compliance using HMRC's PAYE data, so taking someone on and not registering is visible to it.

Assessing your workers

• Eligible jobholders — aged 22 to State Pension age, earning over £10,000 a year. These must be enrolled automatically, without being asked.
• Non-eligible jobholders — younger, older, or earning between the lower qualifying level and £10,000. They can opt in, and if they do you must contribute.
• Entitled workers — below the lower earnings level. They may join a scheme but you are not obliged to contribute.

Assess from day one, not at month end, and reassess variable-hours and zero-hours workers every pay period — that is the most common failure the Regulator finds in small businesses.

Contributions, opt-outs and enforcement

The minimum total contribution is 8% of qualifying earnings, of which at least 3% must come from you; the worker makes up the balance, including tax relief. You must choose a qualifying scheme that accepts all eligible workers — NEST, the government-backed default, is open to every employer — enrol within six weeks of a start date, write to the worker within the same six weeks, and declare compliance to the Regulator within five months.

Opting out has to be initiated entirely by the worker. If the notice arrives within the opt-out window, usually the first month, they are treated as never enrolled and any contributions deducted must be refunded. After the window closes they simply leave the scheme and keep a deferred pot. Deliberately encouraging or inducing staff to opt out is a criminal offence carrying fines of up to £50,000.

Every three years you must re-enrol anyone who opted out or stopped contributing, choosing a date within a six-month window around the anniversary, and file a fresh re-declaration. Keep opt-out notices for four years. Enforcement normally starts with a compliance notice; ignore it and the Regulator can issue a £400 fixed penalty, then escalating penalties of £50 to £10,000 a day depending on your size. A sole director with no other staff is generally exempt — but one other employee, including a co-director with a contract, brings the duties into play.