A Step-by-Step Checklist for Auto-Enrolment Compliance: For New and Growing Businesses

Auto-enrolment compliance is a legal requirement for UK employers to automatically enrol eligible employees into a workplace pension scheme and make contributions on their behalf.

It’s regulated by The Pensions Regulator (TPR) and applies to businesses of all sizes, from startups hiring their first employee to growing teams expanding their workforce. For many businesses, getting support with auto-enrolment compliance early on helps ensure everything is set up correctly and stays compliant as you grow.

To stay compliant, employers must:

• Assess employee eligibility
• Enrol qualifying staff into a pension scheme
• Make minimum contributions
• Maintain accurate records
• Submit a declaration of compliance

Auto-enrolment isn’t just a one-off admin task; it’s an ongoing responsibility that can have serious consequences if handled incorrectly.

Failure to comply can lead to:

• Fixed fines of £400
• Daily escalating penalties
• Intervention from The Pensions Regulator

On the other hand, a well-managed process:

• Keeps payroll running smoothly
• Builds trust with employees
• Reduces admin as your business grows

For many businesses, getting support with auto-enrolment compliance helps ensure everything is handled correctly from day one.

Every UK employer must comply, even if you only have one employee.

This includes:

• Limited companies
• Startups hiring their first team member
• Businesses with part-time or temporary staff. We often get asked if the rules apply to part-time workers or people on short-term contracts and the rules do apply

There’s no grace period, your responsibilities begin as soon as you employ someone.

You must automatically enrol employees who:

• Are aged between 22 and State Pension age
• Earn over £10,000 per year, or the equivalent in a shorter pay period
• Work in the UK

Other employees may still have the right to opt in, so it’s important to assess your workforce regularly.

Minimum contributions are currently set at:

• 3% from the employer
• 5% from the employee

This totals 8% of qualifying earnings.

Accurate record-keeping is essential for compliance. You’ll need to store:

• Employee assessments
• Contribution details
• Opt-in and opt-out notices
• Pension scheme information

These records must usually be kept for at least six years.

Employees can opt out within one month of being enrolled.

If they do, you must:

• Refund any contributions taken
• Record the opt-out correctly
• Re-enrol them every three years if they remain eligible

A new business takes on its first full-time employee. At this point, they must:

• Choose a pension scheme
• Assess eligibility
• Enrol the employee
• Set up payroll contributions

Missing any of these steps can quickly lead to compliance issues.

As a business grows, managing a mix of full-time and part-time staff becomes more complex.

Employers need to:

• Monitor earnings thresholds
• Track eligibility changes
• Handle opt-ins and opt-outs correctly

As payroll becomes more complex, manual processes increase the risk of errors, particularly around contributions and re-enrolment deadlines.

Most businesses can set up auto-enrolment within a few weeks:

• Week 1: Choose a pension provider and assess employees
• Week 2: Set up payroll and enrol staff
• Ongoing: Monitor and maintain compliance

Many businesses run into issues by:

• Missing employee eligibility checks
• Calculating contributions incorrectly
• Forgetting re-enrolment deadlines
• Failing to keep proper records

We’ve covered these in more detail in our guide on how to avoid auto-enrolment mistakes, where we break down what to watch out for.

Costs can vary depending on:

• The size of your workforce
• Your payroll setup
• Whether you outsource support

However, the cost of getting it wrong is almost always higher.

To keep things simple, here’s a step-by-step checklist:

1. Choose a qualifying pension scheme
2. Assess your workforce
3. Identify eligible employees
4. Enrol qualifying staff
5. Communicate with employees
6. Set up payroll deductions
7. Submit your declaration of compliance
8. Keep accurate records
9. Monitor changes in eligibility
10. Re-enrol employees every three years

As your business grows, managing auto-enrolment alongside payroll and compliance deadlines can become increasingly complex.

If you’d rather have peace of mind that everything is handled correctly, HWWA Consulting supports businesses with auto-enrolment compliance, helping you to stay compliant without the stress.