Employer Pension Contributions: The 3% Minimum and Duties

How much employers must pay

Under automatic enrolment the minimum total contribution is 8% of qualifying earnings, and the employer must pay at least 3% of that. Employers can pay more than the minimum, and can pay the employee's share as well.

For 2026/27 the lower limit of qualifying earnings is £6,240, the upper limit £50,270 and the earnings trigger £10,000. The government froze all three at 2025/26 levels in a review published on 18 December 2025. Monthly thresholds are £520, £833 and £4,189; weekly thresholds are £120, £192 and £967.

Auto-enrolment thresholds for 2026/27

Threshold	Yearly	Monthly	Weekly
Lower limit of qualifying earnings	£6,240	£520	£120
Earnings trigger for automatic enrolment	£10,000	£833	£192
Upper limit of qualifying earnings	£50,270	£4,189	£967

Source: The Pensions Regulator: earnings thresholds

Worked example on a £30,000 salary

On a £30,000 salary, qualifying earnings are £30,000 minus £6,240, or £23,760. The employer minimum of 3% of £23,760 is £712.80 a year. The total minimum of 8% is £1,900.80 a year, leaving £1,188.00 for the employee share including tax relief.

Real payroll works per pay period, so totals can differ by a few pence from annual figures.

Minimum contributions on a £30,000 salary, 2026/27

Item	Amount a year
Qualifying earnings (£30,000 minus £6,240)	£23,760
Employer minimum (3%)	£712.80
Total minimum (8%)	£1,900.80
Employee share including tax relief (5%)	£1,188.00

Source: Kael Tripton calculation using The Pensions Regulator minimums

Who must be enrolled

A worker must be enrolled into a workplace pension if they are aged 22 to State Pension age, earn over £10,000 a year and usually work in the UK.

Other workers can usually ask to join a workplace pension, and the employer cannot refuse. Employers must not encourage or force staff to opt out. Staff who opt out within 1 month get their contributions refunded.

Deadlines and ongoing duties

The declaration of compliance must be completed within 5 months of the duties start date. Contributions are usually paid to the scheme by the 22nd of the following month, and staff must be told in writing once they are enrolled.

Every 3 years the employer re-enrols eligible staff who opted out and completes a re-declaration within 5 months of the third anniversary, even if nobody needs re-enrolling. Staff who opted out can ask to rejoin, and the employer must allow this at least once a year.

Penalties for getting it wrong

A fixed penalty notice is £400. Escalating penalty notices are charged per day, depending on the number of PAYE employees: £50 for 1 to 4, £500 for 5 to 49, £2,500 for 50 to 249, £5,000 for 250 to 499 and £10,000 for 500 or more.

Escalating penalty notices: daily rate by number of PAYE employees

Employees	Daily penalty
1 to 4	£50
5 to 49	£500
50 to 249	£2,500
250 to 499	£5,000
500 or more	£10,000

Source: legislation.gov.uk: SI 2010/5, regulation 13

Tax relief, salary sacrifice and planned changes

Under net pay arrangements, pension contributions are taken before Income Tax. Under relief at source, the provider claims basic-rate relief of 20% and adds it to the pot, and higher-rate taxpayers claim the rest through Self Assessment.

Salary sacrifice can cut Income Tax and National Insurance for both sides. From April 2029 the government plans to limit the National Insurance exemption to £2,000 a year of sacrificed contributions; this is not yet in force. The Pensions (Extension of Automatic Enrolment) Act 2023 allows ministers to lower the age for enrolment and reduce the lower earnings limit, but those powers are not in force.

The Pensions Commission said in May 2026 that 15 million people are undersaving for retirement. The government has ruled out changing the minimum contribution rates during this Parliament.

Frequently asked questions

What is the minimum employer pension contribution in the UK?

The minimum employer pension contribution is 3% of qualifying earnings, within a minimum total contribution of 8%. For 2026/27, qualifying earnings are pay between £6,240 and £50,270.

Who must an employer enrol in a workplace pension?

An employer must enrol workers aged 22 to State Pension age who earn over £10,000 a year and usually work in the UK.

How much does an employer pay on a £30,000 salary?

At the 3% minimum, the employer pays £712.80 a year on a £30,000 salary, because contributions are worked out on qualifying earnings of £23,760.

What happens if an employer does not pay pension contributions?

The Pensions Regulator can issue a £400 fixed penalty, then escalating penalties of £50 to £10,000 a day depending on the number of employees.

Is salary sacrifice for pensions changing?

From April 2029 the government plans to limit the National Insurance exemption to £2,000 a year of sacrificed pension contributions. It is not yet in force.