Workplace Pensions and Auto-Enrolment in the UK

This guide is for internationals who have recently started work in the United Kingdom and want to understand the pension deductions on their payslip. After reading it, you will know how automatic enrolment works, what you, your employer and the government pay in, how your take-home pay is affected and where to find answers the official pages leave open.

• What a workplace pension is
• Automatic enrolment and joining voluntarily
• Which earnings count
• What you, your employer and the government pay
• Your take-home pay and salary sacrifice
• Opting out and questions to ask
• FAQ

What a workplace pension is

According to GOV.UK’s guide to workplace pensions, a workplace pension is a way of saving for retirement that is arranged by your employer. You may hear it called an “occupational”, “works”, “company” or “work-based” pension. These names all describe the same basic idea.

A percentage of your pay goes into the pension scheme automatically every payday. In most cases your employer also adds money for you, and you may also get tax relief from the government.

A workplace pension is separate from the State Pension, which depends on your National Insurance record. The same GOV.UK guide links to tools for checking your State Pension age and forecast. It also covers how a pension is affected if you retire abroad, which many newcomers will want to read.

Automatic enrolment and joining voluntarily

You can end up in a workplace pension in two ways. The first is automatic enrolment, where your employer puts you into the scheme without you having to apply. The second is joining voluntarily, which GOV.UK calls “opting in”.

The difference matters because the contribution rules differ between the two routes, as the next sections explain. The official pages used for this guide do not set out the age and earnings conditions that decide whether an employer must enrol someone automatically. Your employer makes that assessment, so your employer or the pension scheme they have chosen can confirm how it applies to you.

If you are not automatically enrolled and join voluntarily, the GOV.UK page on what you, your employer and the government pay states that your employer must contribute the minimum amount if you earn more than £520 a month, £120 a week or £480 over 4 weeks. If you earn these amounts or less, your employer does not have to contribute anything.

Which earnings count

If you have been automatically enrolled, you and your employer must each pay a percentage of your earnings into the scheme. How much you pay, and what counts as earnings, depends on the scheme your employer has chosen.

In most automatic enrolment schemes, contributions are based on your total earnings between £6,240 and £50,270 a year before tax. GOV.UK lists the following as part of your total earnings:

• salary or wages
• bonuses and commission
• overtime
• statutory sick pay
• statutory maternity, paternity and adoption pay
• shared parental pay
• statutory parental bereavement pay
• neonatal care pay

This means a pension deduction can still appear on your payslip while you are receiving statutory sick pay or statutory parental pay.

What you, your employer and the government pay

For most automatic enrolment schemes, GOV.UK sets out these minimum contributions as a percentage of the earnings described above:

• Your employer: 3%
• You: 5%
• Total minimum: 8%

These amounts can be higher for you or your employer under your scheme’s rules, and they are higher for most defined benefit schemes. In some schemes the employer can choose to pay in more than the legal minimum. In those schemes you can pay in less, as long as your employer contributes enough to meet the total minimum.

GOV.UK gives an example for a defined contribution scheme. Each payday you put in £40, your employer puts in £30 and you get £10 in tax relief, so a total of £80 goes into your pension. GOV.UK also points to MoneyHelper’s contributions calculator for working out how much you and your employer will put in.

Tax relief

The government’s share usually comes as tax relief. You normally get it if you pay Income Tax and you pay into a workplace or personal pension. Even if you do not pay Income Tax, you still get an additional payment if your scheme uses a method called “relief at source” to add money to your pension pot.

Your take-home pay and salary sacrifice

Joining a workplace pension reduces your take-home income. GOV.UK notes two possible effects of this. It may mean you become entitled to an income-related benefit, or to more of a benefit you already receive. It may also reduce the student loan repayments you need to make.

Some employers use “salary sacrifice”, sometimes known as a “SMART” scheme. Under this arrangement, you and your employer agree that you give up part of your salary and your employer pays it straight into your pension. In some cases this means you and your employer both pay less tax and National Insurance. Not every employer offers it, and GOV.UK’s guidance is to ask your employer whether they use it.

Opting out and questions to ask

Many people who are new to the UK ask whether they can leave a scheme they were enrolled in automatically. The official pages used for this guide do not explain how opting out works, how long you have to do it or whether contributions already taken are refunded. Your employer and your pension scheme provider can explain these details.

GOV.UK says many of the rules depend on the scheme. These are useful questions to put to your employer when you start a new job:

1. Which pension scheme do you use, and is it defined contribution or defined benefit?
2. What counts as earnings under the scheme rules?
3. What percentage do you and I each pay?
4. Does the scheme use relief at source?
5. Do you offer salary sacrifice?

For advice about increasing a workplace or private pension, GOV.UK points people to a financial adviser and suggests finding one through Unbiased.

FAQ

Do I have to apply to be automatically enrolled?

No. Under automatic enrolment your employer puts you into the scheme, and contributions are taken from your pay each payday. The pages used for this guide do not list the conditions that trigger automatic enrolment, so your employer is the source for whether it applies to you.

How much does my employer have to pay?

In most automatic enrolment schemes, the employer pays 3% and you pay 5% of qualifying earnings, making a total minimum of 8%. If you joined voluntarily, your employer only has to contribute the minimum if you earn more than £520 a month, £120 a week or £480 over 4 weeks.

Do I get tax relief if I do not pay Income Tax?

Tax relief usually depends on paying Income Tax. However, GOV.UK says that if your scheme uses relief at source, you still get an additional payment even if you do not pay Income Tax. Your scheme provider can confirm which method your scheme uses.

What happens to my pension if I leave the UK?

GOV.UK has a separate page on how your pension is affected if you retire abroad, linked from its workplace pensions guide. For questions about how a move affects your visa or immigration status, the right contact is an OISC-regulated adviser or an SRA-regulated solicitor.

Official sources: gov.uk · gov.uk

Last verified: 12 October 2026 against the official pages linked above. Rules and fees change; the official page always wins.

This is general information, not legal or immigration advice. Immigration advice in the UK may only be given by advisers regulated by the OISC or by solicitors regulated by the SRA.