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Getting ready: First steps to prepare for the employer duties

Automatic enrolment detailed guidance for employers no. 2

 

Accompanying resources

Information to workers (short URL: https://is.gd/oxalkH
Summary of information requirements in a quick-reference table format

The different types of worker (short URL: https://is.gd/NoZa8g)
Diagram of the different categories of worker and the criteria for each category

Employer duties and safeguards (short URL: https://is.gd/ZgOUfe)
At-a-glance summary of the duties and safeguards

 

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About this guidance

This guidance is aimed at professionals and employers with in-house pensions professionals.

An employer reading this guidance should note that it provides a summary of the main steps in getting ready and that much of the detail about the requirements is contained in our other guidance. These will be signposted in this document where relevant. This guidance is particularly relevant to employers setting up a pension for the first time.

We recognise that many employers will already have a pension for their workers, and that this will often match or exceed the minimum requirements contained in the duties. In these cases, such employers may just need to check that the minimum requirements are covered in their existing processes.

It will be helpful to employers to be familiar with the different categories of workers. These are explained in detail in Detailed guidance no. 1 – Employer duties and defining the workforce (short URL: https://is.gd/XFUqPB). A quick reminder is also available in the Key terms.

This guidance forms part of the latest version of the detailed guidance for employers (published June 2021).

Changes from last version

  • references to ‘staging date’ have been replaced with ‘duties start date’, except where guidance specifically relates to a staging issue
  • the previous section 1 for employers with a staging date has been removed
  • what was section 2 for new employers has become the main part of the guide
  • many paragraphs have now been re-numbered following the revisions
  • dates in example scenarios have been changed to make them more recent

This guidance is a reference point for the preparations

Introduction

1. The law on the employer duties and safeguards commenced in July 2012. One of these duties places a requirement on employers to automatically enrol certain workers into a pension scheme. There are other duties as well as automatic enrolment, including the provision of certain information to their workforce.

2. An employer is anyone who has entered into a contract with an individual that falls within the definition of ‘worker’. For more information on the definition of worker see Detailed guidance no. 1 – Employer duties and defining the workforce (short URL: https://is.gd/XFUqPB).

3. Each employer already in existence on 1 April 2012 was allocated a date from when the new duties applied to them, known as their ‘staging date’. An employer who first paid PAYE income1 to a worker on or after 1 April 2012 up to and including 30 September 2017 was also allocated a staging date (excluding an employer who first paid PAYE income on or after 2 April 2017 up to and including 30 September 2017 and who did not have a PAYE scheme).

4. An employer in existence on or before 1 April 2012 but who did not have a PAYE scheme, or an employer created between 1 April 2012 up to and including 1 April 2017 who did not have a PAYE scheme, had a staging date of 1 April 2017.

5. An employer in existence on 1 April 2017 who did not fall into any of the groups described in paragraphs 3 and 4 also had a staging date of 1 April 2017.

6. Staging dates started from October 2012 and ended on 1 February 2018. For an employer who had a staging date, the employer duties usually applied to them from a date that was some time after they became an employer. As such, there were steps they could take in advance of their staging date to get ready for the start of the duties.

7. An employer who employs their first worker on or after 2 April 2017 will, in most cases, have the duties apply immediately they become an employer. This is called their duties start date, and is the equivalent of the staging date for employers taking on their first member of staff from 2 April 2017. They will need to be ready for automatic enrolment as soon as they take on their first worker. These employers include:

8. An employer who becomes an employer on or after 2 April 2017 and does not have a PAYE scheme, irrespective of whether they pay PAYE income or not. (This includes an employer who first pays PAYE income on or after 2 April 2017 in respect of any worker up to and including 30 September 2017 and does not have a PAYE scheme.)

9. An employer who first pays PAYE income1 in respect of any worker on or after 1 October 2017.

10. This guidance provides further information about the steps someone considering employing a worker for the first time needs to take to prepare for becoming an employer for the purposes of the employer duties and safeguards.

It is an employer’s responsibility to identify their staging date or duties start date

Becoming an employer

11. When someone is about to employ a worker for the first time, they need to take certain steps in preparation for becoming an employer, such as determining whether they need to register as an employer with HMRC, or taking out liability insurance. Getting ready for automatic enrolment is just one of these steps.

12. Anyone considering employing a worker for the first time needs to be prepared for the onset of their employer duties.

13. The employer duties and safeguards will start to apply to an employer who falls within paragraph 10 above from the date their first worker begins to be employed (their ‘duties start date’).

14. To get ready for the onset of the employer duties and safeguards, anyone considering employing a worker for the first time should:

  • understand their duties start date
  • do an initial assessment of the worker or workers’ likely age and earnings on or before the duties start date. This will indicate if the employer needs to put a pension scheme in place for automatic enrolment for the duties start date
  • put a pension scheme in place if the initial assessment identifies that the worker will meet the eligible jobholder criteria
  • get information ready
  • set up payroll processes and software if needed
  • decide whether to use postponement at the duties start date
  • be ready to handle opt ins if needed
  • keep records

15. These steps are described in further detail below in the remainder of this guidance.

Understanding the duties start date

16 The ‘duties start date’ is the date the employer duties start to apply to the employer, ie the date the first worker begins to be employed by them. For most employers working out the date their first worker began to be employed by them will be straightforward.

17. The date that the first worker begins to be employed is the date from which the worker’s contract with the employer takes effect, ie the contractual start of employment.

18. It does not matter whether the worker is going to be paid above or below the lower earnings limit for national insurance. Even if the employer is not required to set up a PAYE scheme by Her Majesty’s Revenue and Customs (HMRC) the employer duties and safeguards will start to apply to them from the date their first worker begins to be employed by them (see paragraphs 22 to 29).

19. If the worker attends meetings or other events on a voluntary basis before the worker’s contract with the employer takes effect, this doesn’t change the date from which their contract takes effect. The date the worker begins to be employed is still the date the duties begin to apply.

20. Special rules applied for employers who became employers on or after 2 April 2017 up to and including 30 September 2017, as during this period there was an overlap with the new employers who had a staging date  More information on these rules can be found in a previous version of this guidance available on the Internet Archive (short URL: https://is.gd/dFBMp4).

21. In addition, where a director-only company is considering taking on a worker such that the company will become an employer for the purposes of the employer duties and safeguards for the first time on or after 2 April 2017, they should be aware of the interaction of the duties start date with the operation of the exemption from the definition of ‘worker’ for a director. This is only relevant where the director-only company has one director who has a contract of employment and the company is considering taking on a second person on a contract of employment, as described in paragraphs 30-38 below.

New employers without a PAYE scheme

22. In some cases, when someone starts to employ a worker for the first time, they may not be required to register with HMRC as an employer for the purposes of income tax and national insurance contributions.

23. For example, if the worker they are employing does not have a contract of employment but is contracted to perform work or services personally, other than as part of their own separate business (’a personal services worker’), they may not be required to register with HMRC as an employer.

24. If the personal services worker is treated as self employed by HMRC for both income tax and national insurance purposes, the employer will not be required to set up a PAYE scheme. If an employer only employs such personal service workers who are treated as self-employed for both income tax and national insurance purposes they will also not pay PAYE income either.

25. Even if the worker is under a contract of employment there may be some cases when an employer who is an employer for the purposes of the employer duties and safeguards, is not required to register with HMRC as an employer. This may be, for example, because they pay their worker below the lower earnings limit for national insurance with no other taxable benefits and the worker has no other taxable income.

26. Where the worker is under a contract of employment, but the employer is not required to set up a PAYE scheme by HMRC, the employer is still paying PAYE income in respect of their worker. This is because, in our view, PAYE income is total earnings in employment (salary, wage, fees etc), irrespective of whether that amount is above or below the income tax threshold or the lower earnings limit for national insurance.

27. This means that when someone starts to employ a worker for the first time, they may not have a PAYE scheme in place under three possible scenarios:

  • they have a worker under a contract of employment but have not yet set up a PAYE scheme or are in the process of setting it up at the date their first worker begins to be employed. When they pay their worker they will pay PAYE income for the first time
  • they have a worker under a contract of employment and are not required to set up a PAYE scheme by HMRC. When they pay their worker they will pay PAYE income for the first time
  • they have a worker who they employ as a personal services worker and they are not required to set up a PAYE scheme, nor do they pay PAYE income as the worker is treated by HMRC as self-employed for both tax and national insurance purposes

28. It does not matter which of these three scenarios is relevant to the employer, the duties start date in all three scenarios is the contracted start date of employment of the first worker2.

Example 1

zLite set up on 15 November 2018 by Tamala who is self employed. zLite took on their first worker on 2 August 2019 under a contract to perform work or services personally, other than as part of their own separate business (a ‘personal services worker’). Having checked HMRC’s guidance zLite has determined that they do not need to set up a PAYE scheme.

zLite became an employer for purposes of the employer duties and safeguards from 2 August 2019. They have a duties start date determined by of the date their first worker begins to be employed – ie 2 August 2019. This is the date that the employer duties start to apply to zLite.

29. Employers who do not have a PAYE scheme should note when TPR expects them to complete their declaration of compliance. More information on this can be found on our Duties for new employers page (short URL: https://is.gd/iB5Y5c).

Director-only companies

30. If an individual is a director3 of a company and the company has no other workers with a contract of employment (eg an employee), that individual is not a worker by virtue of any office that they hold or contract of employment under which they work. More information on this exemption from the definition of ‘worker’ can be found in Detailed guidance no. 1 – Employer duties and defining the workforce (short URL: https://is.gd/XFUqPB).

31. This means that, where a company has one or more directors and no other employees, the company will not be an employer, provided that either only one of the directors has a contract of employment or none of these directors have a contract of employment (whether written or otherwise) with the company.

32. If a director-only company takes on a worker but none of the directors have contracts of employment they become an employer for purposes of the employer duties and safeguards. None of the directors fall within the definition of worker, even if the worker has a contract of employment. The duties start date will be determined by the start date of employment of the worker.

33. If a director-only company has one director who has a contract of employment and they take on a second person on a contract of employment employer duties and safeguards, the situation is slightly different. This second person could be another director with a contract of employment or another worker on a contract of employment.

34. In this case when the second person with a contract of employment starts employment the company becomes an employer for the purposes of the employer duties and safeguards for the first time. Further, they are an employer of two workers – the second person with a contract of employment and new duties, the director who has a contract of employment with the company (as this director is now no longer exempt from the definition of worker as described in paragraph 30 above.)

35. The duties start date is the date the first worker begins to be employed. In these circumstances, the earliest of:

a. the date the director who has the contract of employment began to be employed, or
b. the date the second person with the contract of employment began to be employed

will determine the duties start date of the new employer.

36. In practice, the date the director who has the contract of employment began to be employed will always be the earliest date and it is this which will determine the duties start date.

37. However, at the time of duties start date the company was not an employer for the purposes of the employer duties and the director was not a worker at the time did not employ any workers. So although the duties are deemed to apply from the start date of employment of the earliest director, the company is not required to give effect to those duties from that date. This operation of the exemption from the definition of ‘worker’ for a director means that the company will only be required to give effect to the employer duties from the date they to apply to the company from only become an employer for the first time (see example 2 below).

Example 2

Joe and Beth are both directors of HIJK Ltd since 23 February 2018. In addition, Joe has a contract of employment with HIJK Ltd. They set up a PAYE scheme in February 2018 and have been paying PAYE income since that date.

Beth is not a worker as she is a director without a contract of employment. Joe is also not a worker as there are no other employees employed by the company. HIJK Ltd is not an employer for the purposes of the employer duties and safeguards.

On 6 November 2018, HIJK Ltd take on a new worker, Lee, on a contract of employment. On this date therefore, HIJK Ltd becomes an employer for the first time with two workers – Lee and Joe.
The start date of employment of their first worker is Joe’s start date of 23 February 2018 and therefore the duties start date for HIJK Ltd is 23 February 2018. However on 23 February 2018 the company was not an employer as they did not employ any workers. Neither Joe nor Beth was a worker on this date.

As a result the company is not required to give effect to those duties from that date. It is not until HIJK Ltd take on Lee that the company becomes an employer for the first time. HJIK Ltd does not have to give effect to the employer duties and safeguards until the date HIJK Ltd becomes an employer for purposes of the employer duties for the first time – from 6 November 2018 – Lee’s start date of employment.

38. Essentially, therefore where a director-only company with one director with a contract of employment becomes an employer for the first time, the duties start date will be the date that director began to be employed. However, practically they will only be required to start to apply the duties from the date the second person with a contract of employment began to be employed because of the operation of the exemption mentioned at paragraph 30.

Making an initial assessment of the workforce

39. The first step for anyone considering employing a worker for the first time is to take an initial view of that worker’s likely age and earnings on the duties start date. The makeup of the workforce is described in Detailed guidance no. 1 – Employer duties and defining the workforce (short URL: https://is.gd/XFUqPB).

40. This will give prospective employers an idea about whether they will have a worker who they will have to automatically enrol, or workers with a right to opt in or to join a scheme. They will then be able to determine what preparations they need to make, eg whether they need to have a pension scheme in place to fulfil their duties.

41. Anyone considering employing a worker for the first time will need to look at the contractual relationships they will have with the people working for them to ensure they correctly identify those who are workers. It is this group of people for whom they may have duties.

The pension scheme for automatic enrolment

42. Having completed the initial assessment of the worker they intend to employ for the first time, anyone considering employing a worker for the first time (referred to as an ‘employer’ from now on) will know whether they are likely to have an automatic enrolment duty from their duties start date.

43. If so, they will need to select an ‘automatic enrolment scheme’. This is a pension scheme based in the UK that meets the automatic enrolment and qualifying criteria.

44. If an employer only has a jobholder with a right to opt in, or an entitled worker with a right to join, there is no requirement to select a scheme in advance of their duties start date, although they can if they wish.

45. Detailed guidance no. 4 – Pension schemes (short URL: https://is.gd/GY7mhy) has more information on the criteria a scheme must meet to be an automatic enrolment scheme.

46. It is important to note that the criteria listed in Detailed guidance no. 4 – Pension schemes (short URL: https://is.gd/GY7mhy) are the minimum features the scheme is required to have. There will be other things to consider before an employer makes a decision about what the type of scheme to use.

47. Some employers will pay for professional advice while others will make decisions with information from a range of sources. The employer pages have more information for employers to help them understand what to consider when choosing a pension scheme: www.tpr.gov.uk/ae-pension

Put administrative procedures in place

48. Once an employer knows which scheme they will be using, there are a number of administrative steps they can take that will help them to fulfil their duties on time.

Contact the chosen scheme and understand the joining process

49. An employer will need to send data to the pension scheme and also find out certain information about how the pension scheme is set up. They should find out from the scheme provider what is needed to achieve active membership, and how long this will take the pension scheme to complete this process.

50. It is important for an employer to know how long it will take to achieve active membership, as they only have six weeks after the eligible jobholder’s automatic enrolment date to complete automatic enrolment and achieve active membership. More detailed information about the steps needed to complete the automatic enrolment process is in Detailed guidance no. 5 – Automatic enrolment (short URL: https://is.gd/YsRnn0).

Prepare data

51. The employer will need to provide the pension scheme with certain information about the eligible jobholder who is being automatically enrolled. A list of this information can be found in the section called Eligible jobholder information to the scheme in Detailed guidance no. 5 – Automatic enrolment (short URL: https://is.gd/YsRnn0) but broadly they are going to need their worker’s:

  • date of birth
  • salary
  • National Insurance number
  • staff contact details

Getting ready to manage opt outs

52. A jobholder has a one-month period after automatic enrolment during which they may choose to opt out. ‘Opting out’ has a specific meaning within the employer duties. It refers to a mechanism under the law which has the effect of undoing active membership, as if the worker had never been a member of a scheme on that occasion.

53. An employer should familiarise themselves with the steps they need to take if they receive an opt-out notice. Detailed guidance no. 7 – Opting out provides more information (short URL: https://is.gd/iJ9xe9).

54. While the pension scheme may administer much of the opt- out process on the employer’s behalf, one of the steps required is for the employer to refund any contributions made by the worker, and must not wait to have the money refunded to them first. The trustees or managers of the scheme must refund any contributions paid over to the scheme to the employer.

55. An employer using an occupational (trust-based) pension scheme to fulfil their duties will need to decide if they wish, when they set up the pension scheme, to negotiate due dates on the relevant schedule with the trustees or managers of the scheme that avoid the need for the pension scheme to refund contributions to the employer. Detailed guidance no. 5 – Automatic enrolment (short URL: https://is.gd/F1N6FH) has more information about the time limits for paying contributions.

Other responsibilities

56. Existing employer responsibilities such as funding the scheme remain unchanged in light of the automatic enrolment duties. The extent of these ongoing responsibilities will depend on the type of automatic enrolment scheme selected. The employer pages have more information for employers in matters relating to the efficient running of a pension scheme: www.tpr.gov.uk/employers

Getting information ready

57. One of the employer duties is to provide information to workers. Irrespective of the category into which those individuals fall, every employer will have an obligation to provide certain, specified information to their workers within prescribed time limits:

  • a jobholder being automatically enrolled, automatically re-enrolled or enrolled following opt in must be provided with information about what this means for them and their right to opt out
  • a jobholder with the right to opt in for the first time, or an entitled worker with the right to join for the first time, must be provided with information about both the right of a jobholder to opt in to an automatic enrolment scheme and the right of an entitled worker to join a pension scheme
  • a worker for whom the employer has chosen to use postponement must be provided with information about the postponement of automatic enrolment and about the right to opt in or join during the postponement period

58. The information requirements are described in Detailed guidance no. 10 – Information to workers (short URL: https://is.gd/JtMvTM). A reference table of all the information requirements is also available in the Information to workers resource.

Giving the information

59. The responsibility is the employer’s to give the statutory information to a worker, and to give the information in writing. ‘Giving’ information, in TPR’s view includes:

  • sending information by post or internal mail
  • handing over information by hand
  • sending information by email
  • sending information in pdf attachments or other attachments by email

60. ‘Giving’ information does not include merely signposting to an internet or intranet site, attaching a URL or displaying a poster in the workplace. In these circumstances the employer is giving the worker the ability to access the information if they choose, but is not giving the worker the actual information.

61. In deciding on the method of giving the information, an employer should consider the appropriateness of the format for their workers, eg the extent to which electronic access is available to them. A range of formats may be required to ensure the information is given to all the workers to whom the employer is required to give information.

62. An employer should also check the completeness and the accuracy of the data they are using for giving the information. For example, where post is returned as ‘gone away’ or email is bounced back as the address is not recognised, an employer would not be considered to have given the information to the worker. Using the most up to date records (eg email addresses) for their workers should minimise the risk of the information not being given.

63. Someone acting on the employer’s behalf, such as an independent financial adviser, pension scheme provider, benefit consultant, accountant or bookkeeper can provide the information, but it remains the employer’s responsibility to make sure that the right information is provided to the right individual on time, and that it is complete and correct.

Setting up payroll

64. Payroll software which is set up for automatic enrolment can be used to work out who needs to be automatically enrolled into a pension scheme. Most aspects of the employer duties can be supported by payroll systems and it is important that the employer gets their system and processes ready ahead of their duties start date.

65. An employer will need to pay their own contributions as well as deduct and pay over the jobholder’s contributions (if they are making any) to the automatic enrolment scheme. They must do this for as long as the jobholder remains in employment with that employer and an active member of the scheme.

66. If the jobholder is also paying contributions, the employer is required, by law, to deduct them for every pay reference period from their automatic enrolment date. (‘Pay reference period’ is explained in Detailed guidance no. 3 – Assessing the workforce (short URL: https://is.gd/PM0ZmM) and ‘automatic enrolment date’ is explained in Detailed guidance no. 3b – Having completed the assessment (short URL: https://is.gd/BTOOU4).) This applies from the duties start date even if the scheme is still processing the enrolment.

67. An employer should also establish from the scheme whether tax relief is to be given at source (contributions deducted from net pay) or under net pay arrangements (contributions deducted from gross pay)4, and ensure their payroll is set up accordingly.

68. As part of setting up the scheme, the employer should understand the rate of contributions to be paid and the components of pensionable pay from which the contribution is to be calculated. The scheme rules, schedule of payments, or direct payment arrangements will define:

  • the components of pay to be included in pensionable pay
  • the rates of contributions to be applied
  • the due dates for paying contributions

69. This may involve discussion with the pension provider, or it may involve reviewing the provider’s online or hard copy information.

70. A clear understanding of these elements, reflected in an employer’s payroll process or system, will enable the employer to calculate and pay across to the provider the correct amount of contributions within the prescribed timescales.

71. Finally, the employer should build into their payroll processes the ability to refund without delay any contributions deducted from a jobholder who opts out during the opt-out period.

Deciding whether to use postponement at the duties start date

72. Postponement is described as ‘postponement of automatic enrolment’, and is sometimes referred to as a ‘waiting period’. The way postponement works is to postpone the assessment of a worker for a period of up to three months. It is therefore effectively a postponement of whichever employer duty may apply, depending on the category of worker.

73. The way an employer exercises the choice to use postponement in relation to a worker is to issue that worker with a notice. Postponement is described in Detailed guidance no. 3a – Postponement (short URL: https://is.gd/Cn5ocm).

74. Using postponement at the date the employer duties first start to apply (the duties start date) does not mean that the onset of the duties themselves are postponed. The start date of employment of the first worker remains the date that the employer duties start to apply.

75. However, if an employer is using postponement for all their workers, the practical effect may be the same as if the duties start date was postponed. This is because most of the activity that an employer has to start carrying out (with the exception of providing the postponement notice) would be put back by up to three months.

76. Having completed the initial assessment, an employer will have an idea whether they need to put a pension scheme in place for automatic enrolment or whether they are likely to only have an information duty at the duties start date. They will also have an idea of the administrative processes, (potentially including payroll software support) they need to put in place. Depending on the proximity of the duties start date they will be able to judge whether they need more time to prepare and whether they will need to use postponement.

Getting ready to manage opt ins or requests to join

77. If an employer has identified that they are likely to have a jobholder who has a right to opt in or an entitled worker with a right to join, they should familiarise themselves with the steps they will need to take if they receive an opt-in notice. For more information, see Detailed guidance no. 6 – Opting in, joining and contractual enrolment (short URL: https://is.gd/iqiR2c).

Record-keeping

78. Employers must also keep certain records in support of the employer duties that will enable them to demonstrate their ongoing compliance. They should build these record-keeping requirements into their administrative processes.

79. More information on the records an employer must keep is available in Detailed guidance no. 9 – Keeping records (short URL: https://is.gd/ZzgjF2).

Making a formal assessment of the workforce

80. The final step for an employer is to make a formal assessment of their workforce to work out what they need to do – whether providing information or completing automatic enrolment.

81. The first time they will need to do this is on:

  • their duties start date, or
  • if they have chosen to use postponement for all their workers:
    – on the deferral date, or
    – on the date an opt-in or joining notice is received from a worker during the postponement period.

82. Further information on how to make the assessment can be found in Detailed guidance no. 3 – Assessing the workforce (short URL: https://is.gd/PM0ZmM).

What next?

Every employer who is likely to have any enrolment duties should read the following guidance:

Detailed guidance no. 4 – Pension schemes(short URL: https://is.gd/GY7mhy)
Explains the criteria that pension schemes must meet to be able to be used in relation to the new duties.

Detailed guidance no. 5 – Automatic enrolment(short URL: https://is.gd/YsRnn0)
Detailed information on the entire automatic enrolment process.

Detailed guidance no. 7 – Opting out (short URL: https://is.gd/iJ9xe9)
What to do if a jobholder chooses to opt out of the pension scheme after being enrolled.

Employers who are likely to have workers with a right to join a scheme outside the automatic enrolment process should read Detailed guidance no. 6 – Opting in, joining and contractual enrolment (short URL: https://is.gd/iqiR2c).

For more information on how an employer determines if they have an enrolment duty, an employer should read Detailed guidance no. 3 – Assessing the workforce (short URL: https://is.gd/PM0ZmM).

An employer who is considering using postponement should read Detailed guidance no. 3a – Postponement (short URL: https://is.gd/Cn5ocm).

Employers must also be aware of the legal safeguards that have been put in place to protect the rights of individuals under the pensions reform. These safeguards apply to all employers from the date the law commenced in July 2012. Detailed guidance no. 8 – Safeguarding individuals (short URL: https://is.gd/DTpBx2) has full details.

Key terms

Summary of the different categories of worker

The table below is a quick reminder of the different categories of worker. These are explained in detail in Detailed guidance no. 1 – Employer duties and defining the workforce.

Category of worker Description of worker
Worker An employee or someone who has a contract to perform work or services personally, that is not undertaking the work as part of their own business.
Jobholder

A worker who:

  • is aged between 16 and 74
  • is working or ordinarily works in the UK under their contract
  • has qualifying earnings
Eligible jobholder

A jobholder who:

  • is aged between 22 and state pension age
  • has qualifying earnings above the earnings trigger for automatic enrolment
Non-eligible jobholder

A jobholder who:

  • is aged between 16 and 21 or state pension age and 74
  • has qualifying earnings above the earnings trigger for automatic enrolment
    or
  • is aged between 16 and 74 • has qualifying earnings equal to or below the earnings trigger for automatic enrolment.
Entitled worker

A worker who:

  • is aged between 16 and 74
  • is working or ordinarily works in the UK under their contract
  • does not have qualifying earnings

Footnotes

[1] In our view PAYE income is total earnings in employment (salary, wage, fee etc) whether that amount is above or below the income tax threshold or the lower earnings limit for national insurance.

[2] Special rules applied for employers who became employers on or after 2 April 2017 up to and including 30 September 2017, as during this period there was an overlap with the new employers who had a staging date  More information on these rules can be found in a previous version of this guidance available on the Internet Archive (short URL: https://is.gd/dFBMp4).

[3] Paragraph 32 of Detailed guidance no. 1 – Employer duties and defining the workforce (short URL: https://is.gd/XFUqPB) explains what it means to hold office as a director.

[4] For more information on net pay arrangements see HMRC’s Employer Guide CWG2: https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions (short URL: https://is.gd/4vODim).