Employer Duties & Worker Categories
Your legal duties depend on which category an employee falls into based on their age and earnings.
| Worker Category | Age | Annual Earnings | Employer Duty |
| Eligible Jobholder | 22 to State Pension Age | Over £10,000 | Must auto-enrol & contribute. |
| Non-eligible Jobholder | 16–21 or SPA to 74 | Over £10,000 | Right to opt-in; employer must contribute. |
| Non-eligible Jobholder | 16–74 | £6,240 to £10,000 | Right to opt-in; employer must contribute. |
| Entitled Worker | 16–74 | Under £6,240 | Right to join; employer contribution optional. |
2026/27 Contribution Rates & Thresholds
The Department for Work and Pensions (DWP) has confirmed that the key thresholds will remain frozen for the 2026/27 tax year to provide stability while the ongoing Pensions Commission reviews long-term adequacy.
The Contribution Minimums
The standard minimum remains at 8% total for the “Qualifying Earnings” band:
- Employer Minimum: 3%
- Employee Contribution: 5% (usually 4% + 1% tax relief)
Thresholds for 2026/27
| Threshold Name | Frequency | Value |
| Earnings Trigger | Annual | £10,000 (£833 monthly) |
| Lower Earnings Limit (LEL) | Annual | £6,240 (£520 monthly) |
| Upper Earnings Limit (UEL) | Annual | £50,270 (£4,189 monthly) |
Critical Note: Contributions are calculated on the “band” between the LEL and the UEL. For someone earning £30,000, you only calculate 8% on the portion above £6,240.
The Re-enrolment Process (Every 3 Years)
Every three years, you must “put back” employees who previously opted out. This is a cyclical duty that cannot be skipped.
- Choose a Re-enrolment Date: This must fall within a 6-month window (3 months before or 3 months after the 3rd anniversary of your original staging/duties start date).
- Assess Your Staff: Identify anyone who opted out or stopped contributing more than 12 months ago.
- Process Re-enrolment: You cannot use postponement for re-enrolment. Eligible staff must be put back into the scheme from your chosen date.
- Write to Employees: You must inform affected staff in writing within 6 weeks of your re-enrolment date.
- Re-declare Compliance: You must submit a “Re-declaration of Compliance” to The Pensions Regulator (TPR) within 5 months of your anniversary date, even if no one was re-enrolled.
Key 2026 Context: State Pension Age (SPA)
From 6 April 2026, the State Pension Age begins its transition from 66 to 67.
- Why it matters for Payroll: The upper age limit for auto-enrolment is tied to the SPA.
- The Action: Ensure your payroll software is updated with the new SPA birth-date tables. An employee who would have reached SPA (and thus moved to “Non-eligible” status) at 66 may now remain an “Eligible Jobholder” for longer.
Operational Checklist for Hewitt’s Payroll
- Record Retention: Remember the “6-Year Rule” mentioned in our other guides; pension records (opt-outs, contributions, joiners) must be kept for 6 years.
- Opt-out Refunds: If an employee opts out within the first month, you must refund their contributions in full via the next available payroll run.
- NMW/NLW Interaction: Ensure that pension salary sacrifice arrangements do not take an employee’s “Reference Salary” below the National Minimum Wage (£12.71 for 21+ from April 2026).