Payroll & Auto Enrolment – All In One

Automatic Enrolment is anything but Automatic

Pretty much every employer in the UK has heard of auto enrolment, but many don’t fully understand it.

Auto enrolment is the “Automatic” enrolment of staff into a workplace pension. It is “Automatic” for the employee as they do not need to do anything but are rather informed when they have been enrolled.

It is however anything but Automatic for the employer, there are many different steps you need to take to make sure you are complying with the new legislation. The pensions regulator has already fined a number of employers for failing in their duties, with Dunelm being hit the hardest after it had to pay £143,000 towards unpaid pension contributions.

Common Mistakes

A recently published report by the Pension Regulator highlighted some common mistakes by employers who did not properly understand their duties.

The Pensions Regulator has witnessed cases where employers have registered on the Government Gateway website  believing this was the end of their compliance duties, in fact they need to register for a Government Gateway ID as well as declare their compliance with the Pensions Regulator, these are 2 separate processes.

In another instance an employer was running two PAYE schemes, one for its general staff and a smaller one for its management. The employer only enrolled its general staff as that PAYE scheme was larger hence the staging date was sooner, what the employer failed to realise was there is only one staging date per employer which is determined by its largest PAYE scheme. This resulted in the employer failing to comply by its staging date as all of its staff was not enrolled.

The Pensions Regulator has many times stressed that “Employers and their advisers should be aware that it remains the responsibility of the employer to correctly identify their own staging date. ”

Finally one employer submitted an online declaration of compliance to inform the Pensions Regulator that they had met their compliance duties. After verifying these with the employers chosen pension provider and further investigation, the Pensions Regulator discovered that employer had not taken any steps to choose and set up a workplace pension scheme.
The employer had incorrectly made the assumption that their payroll software would automatically communicate with the pension provider without the employer having to do anything.

Employers need to carefully choose a pension scheme for their employees and work closely with the pension provider to ensure fully compliance to auto enrolment legislation.

The full report can be found here:

There is currently a lot confusion with regards to auto enrolment and employer’s duties in order to comply, speak to an expert such as Ontime and we can take the stress away, call now 0113 8267260.



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