Payroll software and pension auto-enrolment: what UK employers and workers should check

Most employers now let payroll software assess each worker every pay period and decide who must be put into a workplace pension. That works only if the software has the right data: who counts as a worker, their age and what they earn. When it gets those wrong, the legal duty still sits with the employer. This page sets out the automatic enrolment rules in the Pensions Act 2008 for workers and employers in Great Britain.

The short answer: an employer must automatically enrol a jobholder aged at least 22 and under state pension age who earns more than the earnings trigger into a qualifying pension scheme (s3). Other jobholders can ask to join (s7). Anyone enrolled can opt out (s8). Employers must not induce workers to opt out, must not screen job applicants on whether they would opt out, and must not punish workers for the duties applying to them (ss50, 54 and 55).

Who is assessed

• Jobholders: a worker who works or ordinarily works in Great Britain under their contract, is aged at least 16 and under 75, and is paid qualifying earnings by the employer in the pay reference period (s1(1)). With more than one employer, each employment is assessed separately (s1(2)).
• Workers, not just employees: the duties use the wider "worker" category, so someone a scheduling app or platform treats as self-employed may still need to be assessed. See worker status.

The automatic enrolment duty

• Who is enrolled: a jobholder aged at least 22, who has not reached pensionable age, and to whom earnings of more than £10,000 are payable in the relevant pay reference period, as the figure stands in s3(1) on legislation.gov.uk. For pay reference periods shorter or longer than 12 months the figure is adjusted proportionately (s3(6B)).
• What the employer must do: make the prescribed arrangements so the jobholder becomes an active member of an automatic enrolment scheme from the automatic enrolment date (s3(2)). This does not apply if the jobholder was already an active member of a qualifying scheme on that date (s3(3)).

Opting in and opting out

• Opt in: a jobholder who is not an active member of a qualifying scheme, and is not already due to be enrolled, can by notice require the employer to arrange membership of an automatic enrolment scheme (s7(3)).
• Opt out: a jobholder who has been enrolled can give notice to opt out. They are then treated as never having become an active member on that occasion, and contributions paid on that basis must be refunded in line with regulations (s8(2)). The form, timing and recipient of the notice are set by regulations, which must require the notice to explain its effect and be signed or otherwise authorised by the jobholder (s8(5) and (6)).

Protections

• Recruitment: an employer contravenes the Act if any statement or question in recruitment indicates that an application may be decided by whether the applicant might opt out (s50). That covers job adverts, application forms, questions to referees and proposed terms, including automated screening questions.
• Inducements: an employer must not take action for the sole or main purpose of inducing a worker to give up scheme membership, or a jobholder to opt out, without joining another qualifying scheme (s54). The Pensions Regulator can issue compliance notices.
• Detriment: a worker has the right not to be subjected to a detriment because action was taken to enforce these duties in their favour, or because the automatic enrolment provisions apply or might apply to them (s55(1)). The claim must be made in good faith (s55(2)). A complaint goes to an employment tribunal using the Employment Rights Act 1996 detriment procedure (s56).
• Dismissal: an employee dismissed for one of those reasons is regarded as unfairly dismissed (Employment Rights Act 1996, s104D).

Practical steps

• Employers: check that payroll and HR systems feed the pension assessment with every worker, including people paid through apps or on variable hours, and with correct dates of birth and earnings for each pay reference period. Review automated recruitment questions so none asks about pension plans. Keep a record of who was enrolled, who opted in and who opted out, and when.
• Employees and workers: check your payslips for pension deductions once you meet the age and earnings conditions. If you were not enrolled, ask in writing why; if you are told to opt out to get or keep work, keep a note of it.

For what your payslip must show, see itemised pay statements; for deductions taken in error, unauthorised deductions. Contribution levels and many procedural details are set in regulations not covered here. Part 1 of the Pensions Act 2008 applies in Great Britain. This page is general information on the law as at 2 November 2026, not legal advice.