All employers now need to start contributing to a workplace pension for all eligible staff, from the day they start work. Read our guide to some of the things you need to know to ensure your payroll contributions are correct.
Do I need to register and which employees should I include?
You are classed as an employer if you pay someone regularly via the PAYE system and provide them with wage slips. According to the UK Government’s workplace pension guide,
You must enrol and make an employer’s contribution for all staff who:
- are aged between 22 and the State Pension age
- earn at least £10,000 a year
- normally work in the UK (this includes people who are based in the UK but travel abroad for work)
If you are unsure about whether or not you are classed as an employer, please contact us and we can help you confirm your status.
What if employees don’t want a workplace pension
You may find that an employee does not want to take part in the workplace pension scheme. In this case it is still your responsibility as an employer to register them for the scheme, and make the correct payroll deductions. It is then up to the employee to ‘opt-out’ of the pension scheme by contacting your pension provider. If the employee opts out within 30 days, they will be entitled to a full refund of any contributions they have made.
The cost of getting it wrong – fines
The Pensions Regulator (TPR) has several statutory powers they can use to enforce payment of employer contributions. If you incorrectly calculate your workplace pension contributions, you may be served with an Escalating Penalty Notice (EPN). If you continue to ignore warnings from the TPR, the Pensions Regulator has the right to fine your company. The fine for small employers with 1 to 4 staff who fail to comply with an EPN is £50 per day and for those with 5 to 49 it is £500 per day.
Make sure your payroll is in order to avoid any penalties. For help with payslips and employee contributions, please give Roden Associates a call today on 0131 677 0114 or book a free consultation via our contact page.
Compliance – reminder about Declaration of Compliance
Remember, you must complete your Declaration of Compliance and send the form to the TPR. This form outlines what you’ve done to comply with your automatic enrolment duties as an employer.
Your Declaration of Compliance has to be received by TPR within 5 months of your auto enrolment staging date or you could be fined.
Let us help you with auto-enrolment
Hopefully this guide has been helpful to you, and we hope we’ve not made Workplace Pensions sound too scary! There is a lot to remember and quite a few actions employers need to take to avoid being fined.
If you are unsure about anything you’ve read, contact the experts at Roden Associates today. We offer friendly, professional payroll advice to small and medium sized businesses. Please pick up the phone and call our Edinburgh office on 0131 677 0114.