What's covered in this guide?:
Pension Setup
Before using pension features, you’ll need to set up a pension provider.
Go to: Payroll > Settings > Pension Providers
You can configure:
Pension provider name
Employer number (if applicable)
Employee contribution (as a % or a fixed amount)
Employer contribution (as a % or a fixed amount)
Whether contributions are calculated on qualifying earnings or total earnings
Tax relief type
Enable automatic pension assessment
💡 Note: If Enable automatic pension assessment is turned on, Workforce will automatically assess employees during pay runs based on their age, earnings, and current pension status. To learn more, see 'Joining a workplace pension'.
📝 Note: If a fixed contribution amount is set at the provider level, any employee membership using that provider will inherit the fixed amount unless a custom amount is set on the membership itself.
Manage employee pension details
Each employee has a pension membership that you can manage from their staff profile.
Go to: Staff > [Employee] > Payroll > Pension tab
Here you can view and update:
Pension provider
Member number
Contribution rates
Enrolment status
How automatic assessment works
When automatic assessment is enabled:
Employees are assessed on each pay run, based on age, earnings, and current pension status
This determines whether the employee needs to be enrolled or notified of their rights
Employees who are already enrolled, opted out, or postponed are skipped from re-assessment until a relevant trigger occurs. For example, an opted-out employee is automatically reassessed roughly 3 years after opting out, and a postponed employee is reassessed once their postponement period ends
Worker classifications
Employees are classified into one of the following categories:
Eligible (not enrolled): must be enrolled into a pension
Non-Eligible Type A: can opt in and receive employer contributions
Non-Eligible Type B: can opt in and receive employer contributions
Entitled: can opt in, but employer contributions are not required
Excluded: not eligible for pension enrolment
Unknown: required employee information is missing or the employee has not yet been assessed
Pension statuses
An employee's pension status reflects their current situation. The underlying states are Enrolled, Opted Out, Postponed, or Pending (not yet enrolled).
While Pending, the status shown reflects the worker classification: "Eligible (not enrolled)", "Non-Eligible", "Entitled", "Excluded", or "Pending Assessment" if no assessment has run yet.
What happens during pay runs
During a pay run, Workforce may highlight actions you need to take, for example:
Eligible but missing a member number: a message noting the employee is eligible for automatic enrolment but has no member number, and prompting you to add one and enrol by a stated date.
Auto enrolled this pay run: confirms the employee has been automatically enrolled, with contributions calculated on qualifying earnings.
Non-eligible jobholder: notes the employee has a legal right to choose to opt in.
Entitled worker: notes the employee may request to join, and that employer contributions are not required for them.
When an employee is enrolled, Workforce sends the required statutory notification email confirming their enrolment and their rights under workplace pension law.
Similar statutory emails are sent for postponement and ineligibility.
Pension sacrifice compliance checks
Workforce also runs compliance checks on pension sacrifice and contributions during the pay run:
Warning (does not block posting):
Contribution below 8% auto-enrolment minimum – the contribution falls short of the 8% AE minimum, measured on post-sacrifice qualifying earnings. In practice this can only occur with a fixed-amount sacrifice (a percentage-based sacrifice can't mathematically fail this check), and entitled workers are exempt.
Errors (block pay run posting):
Pension sacrifice takes pay below National Minimum Wage – triggered when pay passes the minimum wage check with the pension sacrifice added back, but fails the check without it.
Pension sacrifice eats into statutory pay – triggered when earnings cover the relevant statutory pay floor (SMP/SPP/SSP) with the pension sacrifice added back, but fail to cover it without it.
If a pay run is blocked by one of these errors, review the employee's pension sacrifice configuration and adjust the sacrifice amount, or the employee's pay, before reposting.
Postponement
If postponement has been applied to a staff member (up to a maximum of 3 months):
auto-enrolment is delayed until the postponement end date
the employee is reassessed during the next pay run after postponement ends
if the employee is still eligible, they may then be enrolled
the statutory enrolment notification is sent once enrolment occurs
No manual intervention is required once postponement has been configured correctly.
Pension Contributions
Pension contributions are calculated automatically based on your setup.
Contributions can be based on:
qualifying earnings
total earnings
Employee and employer contributions are applied automatically, whether configured as a percentage or a fixed amount. Contribution rates or amounts can also be adjusted per employee where required.
Where an employee's membership has salary sacrifice enabled, their contribution is applied as a pre-tax deduction rather than a post-tax contribution, this works the same way whether the sacrificed amount is a percentage or a fixed amount.
Note: Some pension providers may require additional setup or manual submission steps after a pay run.
Important notes
Employees can be marked as opted out within Workforce where appropriate.
Some pension providers may require a member number before contributions can be submitted successfully.
Employees are reassessed over time where required.
Some pension features may vary depending on your organisation's setup.
Provider-specific behaviour
Some pension providers, including Nest, may:
require additional setup
use provider-specific schedules or groups
send employee communications directly
require manual troubleshooting steps for failed submissions
For provider-specific setup and integration guidance, see: Nest Pension Integration