Understanding auto-enrolment thresholds
Your guide to auto-enrolment thresholds, and what they mean for payroll.
What are auto-enrolment thresholds?
The government sets auto-enrolment thresholds to decide which of your employees need to be enrolled into your workplace pension scheme.
What does the process look like?
- On your duties start date (the day your first eligible employee starts work) you must figure out which of your employees you need to auto-enrol. This will depend on how much they earn and their age. Further details about this can be found below.
- You'll need to check your employees’ age and earnings every pay period (the regular interval at which you pay your staff, eg, monthly, weekly, etc) to ensure that everyone who is eligible for auto-enrolment is in your scheme.
- Every three years you must re-enrol any eligible employees who have left the scheme (known as ‘opting out’) or stopped or reduced their contributions below the minimum level. This process is called re-enrolment – it gives employees another chance to start saving.
Which employees must be auto-enrolled?
You need to auto-enrol any of your employees who:
- are aged between 22 and the State Pension age
- Earn at least £10,000 a year (gross - before tax and National Insurance (NI) is taken) and works in the UK.
These are known as eligible jobholders.
Any employee who doesn’t meet these auto-enrolment requirements can ask to join your pension scheme (known as ‘opting in’). You’ll need to contribute a minimum of 3% to their pensions.
You communication duties
It’s important to let your employees know in writing when they’ve been auto-enrolled and to explain how it works, including:
- the date they were added to the pension scheme
- the type of pension scheme and who runs it
- how much they’ll contribute and how much you’ll pay in
- how to opt out of the scheme, if they want to.
You’ll need to do this within six weeks of your duties start date to meet your legal responsibilities.
Current thresholds for enrolment and contributions
If you use qualifying earnings to work out pension contributions, who you need to enrol and how much you need to pay is determined by the auto-enrolment earning thresholds. These are reviewed by the government every year.
The earnings thresholds for the 2026/27 tax year are:
| Calculated on gross earnings before deductions | Annual | Weekly | Monthly | What this means |
|---|---|---|---|---|
| Lower limit of qualifying earnings | £6,240 | £120 | £520 | You don’t need to pay contributions on earnings below this amount. |
| Earnings trigger for auto-enrolment | £10,000 | £192 | £833 | Eligible employees earning more than this must be auto enrolled. |
| Upper limit of qualifying earnings | £50,270 | £967 | £4,189 | You don’t need to pay contributions on earnings above this limit. |
How these rules are applied depends on an employee’s age and earnings:
- Employees who meet the criteria for auto-enrolment – see the ‘Which employees must be auto-enrolled?’ section above.
- Both employer and employee make contributions based on their qualifying earnings between £6,240 and £50,270.
Employees who are:
- Aged between 16 and 21 or State Pension age and 74 and earning over £10,000 a year.
- Aged between 16 and 74 and earning between £6,240 and £10,000 a year.
- Non-eligible jobholders are not automatically enrolled, but if they ask to join you must enrol them and make contributions.
Employees who are:
- Aged between 16 and 74 and earning below £6,240 a year.
- They can ask to join but you are not required to make contributions, unless you choose to.
How to calculate qualifying earnings
Qualifying earnings are the portion of your employee’s earnings used to work out their pension contributions. This is called the qualifying earnings band - the earnings between the lower and upper limits shown in the table above.
If you use qualifying earnings to calculate contributions, you don’t pay anything on the first £6,240 an employee earns in a year, or on any earnings above £50,270 (gross before tax and National Insurance is taken).
What you pay
What you do pay is at least 3% of earnings between those two figures - the employee’s qualifying earnings. It’s typical for most employers to pay contributions above this amount, but it is the employer’s choice.
For example, if an employee earns £16,240 a year, you have to pay at least 3% of £10,000 in contributions.
In a nutshell:
- Employers and employees must together contribute a minimum of 8% of an employee’s qualifying earnings.
- You must contribute at least 3% of this, with the remainder made up by the employee and tax relief.
How to manage contribution payments
You can choose to pay more than the minimum contribution each month. You can pay higher contributions for certain groups of employees and also choose to pay on earnings above the upper limit for qualifying earnings of £50,270. These options can be managed within your Online Services account.
You must pay your contributions by the 22 day of the month following the payroll deduction. For example, if you’ve submitted contributions for July, we’d need payment by 22 August. You can arrange for us to collect payment automatically each month - one less thing for you to think about.
There are other ways of calculating contributions. You can find out more on our earnings basis page.
Payroll examples using auto-enrolment thresholds
To understand how auto-enrolment thresholds are applied, it’s important to remember:
- Contributions are only based on an employee’s earnings within the qualifying band — not their total earnings.
- If an employee’s pay falls below the lower limit, no contributions are paid — unless the employee opts in.
- If an employee’s pay exceeds the upper limit, contributions are capped at the upper threshold.
Here are some examples:
Common mistakes and how to avoid them
Running a workplace pension scheme comes with important auto-enrolment duties, and mistakes can happen. To help you stay compliant, here are some common employer errors when submitting data - and how to avoid them:
- Using gross pay instead of qualifying earnings when calculating contributions.
- Applying the wrong earnings thresholds for auto-enrolment — remember, these are reviewed every year.
- Miscalculating pension contributions for employees on maternity leave or other absences.
To avoid these errors, check your employees’ ages and earnings each time you pay them. This ensures everyone who should be enrolled is included, and that you’re paying at least the minimum contribution levels.
What to do if you submit incorrect data
Made a mistake? Don’t worry - we’re here to help.
You can update some of an employee’s personal details after they’ve been submitted through your Online Services account. Find out more in our handy Online Services guide.
If you need to change an employee’s title, gender, surname, date of birth or National Insurance number, please get in touch with us and we can help you make the update.
Need a hand explaining auto enrolment?
With our step-by-step guides and communications toolkit, we’ve got you covered.
