Do I Have to Give My Staff a Workplace Pension in 2026/27?

Yes — if you employ at least one person in the UK, you have workplace pension duties, and they apply from the day your first employee starts work. For 2026/27 you must automatically enrol every member of staff aged 22 to State Pension age who earns over £10,000 a year, and pay at least 3% of their qualifying earnings into a pension scheme. Even where nobody meets those tests, you must still assess your staff, write to them and declare your compliance with The Pensions Regulator.

Who has to be auto-enrolled in 2026/27?

Automatic enrolment applies to what the rules call eligible jobholders. You must put a member of staff into a workplace pension, and contribute to it, if they:

• are aged between 22 and State Pension age;
• earn more than £10,000 a year (£833 a month, or £192 a week); and
• ordinarily work in the UK.

The Department for Work and Pensions reviews these figures each year. For the 2026/27 tax year it has confirmed on GOV.UK that the earnings trigger stays at £10,000 and the qualifying earnings band stays at £6,240 to £50,270 — the same as 2025/26.

Staff who do not meet all three tests still have rights. Anyone aged 16 to 74 earning between £6,240 and £10,000 can ask to join your scheme, and if they do you must contribute for them as well. Staff earning under £6,240 can also ask to join, although you are not required to contribute in that case. This is why you must assess everyone on the payroll each pay period, not just once at the start.

How much does a workplace pension cost an employer?

Minimum contributions are set by law at 8% of qualifying earnings, of which the employer must pay at least 3%. The employee makes up the difference — usually 5% — and in most schemes basic-rate tax relief covers part of their share, so the hit to their take-home pay is smaller than it first looks.

Crucially, the percentages are not applied to the whole salary. Qualifying earnings for 2026/27 are the slice of pay between £6,240 and £50,270 a year, and they include salary, bonuses, overtime and statutory payments such as sick pay and maternity pay — not just basic wages.

On top of the contributions themselves, allow for the administration: choosing a scheme, assessing staff every pay run, handling opt-ins and opt-outs, and keeping accurate records. Many small employers hand this to their accountant alongside payroll — our payroll and auto-enrolment service covers the whole cycle, from scheme set-up to the ongoing assessments and declarations.

Worked example: what a £28,000 employee costs in 2026/27

Take an employee on a salary of £28,000 a year, enrolled at the minimum contribution rates.

• Qualifying earnings: £28,000 − £6,240 = £21,760
• Total minimum contribution (8%): £1,740.80 a year
• Employer share (3%): £652.80 a year — about £54.40 a month
• Employee share (5%): £1,088.00 a year — around £90.67 a month before tax relief

Where the scheme uses relief at source, the employee actually pays £870.40 over the year and the government adds £217.60 in basic-rate tax relief to bring the total up to £1,088. The direct pension cost to the business is therefore roughly £653 a year for this employee — as a rule of thumb, minimum employer contributions add a little over 2% to the headline salary of a mid-range earner. To see the full picture, including employer National Insurance, try our cost of hiring an employee calculator.

Your deadlines and ongoing duties

Your legal duties begin on your duties start date — the day your first member of staff starts work. From that date you must:

• assess your staff and enrol anyone who is eligible into a qualifying pension scheme;
• write to all staff to explain how automatic enrolment affects them;
• complete your declaration of compliance with The Pensions Regulator no later than five months after your duties start date; and
• carry out re-enrolment every three years, putting back in anyone who previously opted out and still meets the criteria, followed by a re-declaration of compliance.

These duties are not a one-off. Every pay run you need to check whether anyone has crossed the £10,000 trigger or turned 22, process opt-ins and opt-outs, and keep your records up to date. A new starter on £9,500 who gets a pay rise in September can become eligible overnight, and your payroll needs to catch it.

What happens if I get it wrong?

The Pensions Regulator actively enforces automatic enrolment. Miss your declaration or fail to enrol eligible staff and you can expect a compliance notice, followed by fixed and escalating financial penalties if you do not put things right — and you may also have to backdate missed contributions. The good news is that compliance is inexpensive relative to the risk: for most small employers it amounts to a few hours of set-up and a routine payroll process from then on.

Frequently asked questions

I am the only director of my company — do I need a workplace pension?

If you are the sole director with no other staff, the company normally has no automatic enrolment duties, though you should tell The Pensions Regulator that you are not an employer. Many directors still pay into a pension voluntarily, because employer contributions are usually a tax-efficient way to take value out of the company.

Can my employees opt out of the pension?

Yes. Once enrolled, an employee can opt out, and if they do so within the opt-out window their contributions are refunded. You must never encourage staff to opt out — that is unlawful — and anyone who has opted out must be put back in at your three-yearly re-enrolment if they still meet the criteria.

Do employer pension contributions save the company tax?

Generally, yes. Employer contributions are normally an allowable business expense, so they reduce the profit on which the company pays corporation tax, and unlike salary they attract no employer National Insurance. Your accountant can confirm the position for your circumstances.

Written by the Accountactical Team — ACCA-Approved Accountants, London.

This article is general information for UK employers, not formal tax, pensions or financial advice — please speak to an accountant or regulated adviser about your own circumstances before acting.