I have recently started a new business and have employed 1 staff member. What are my obligations in relation to PAYE & work place pensions?




When starting a new business and taking on a member of staff then as well as setting up a PAYE scheme you will also need to assess them to see if they are eligible to be put into a workplace pension scheme. You will receive correspondence from The Pension Regulator about automatic enrolment.

Since 1 October 2017, if you employ someone for the first time your automatic enrolment duties begin on the first day your first member of staffs starts work.


Every worker who meets the eligibility criteria must be enrolled into a workplace pension if they are aged 22 or over, are under State Pension age, earn more than £10,000.00 a year and work in the UK.


All employers must let their staff know in writing if they are being enrolled into a workplace pension or not. Those who are not eligible will have the option to opt-in. If an employee does not want to be in your pension, they can opt out within one month and receive a refund of contributions. If they choose to leave the pension after this no refund will be received.


The government has set a minimum percentage that has to be contributed by the employer. This is currently one per cent and increases to two percent from April 18 and three per cent from April 19.


These minimum percentages apply to qualifying earnings, what an employee earns over a minimum amount (currently £5,876) up to a maximum limit (currently £45,000).


You must complete a Declaration of Compliance to The Pension Regulator within five months of your automatic enrolment duties beginning.


The advice above is specific to the facts surrounding the questions posed. Neither PKF-FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.


Get in touch with Ruth Emery via email