3 pension duties TPR expects payroll software to handle for UK employers

What to take away

What TPR expects from employers and their payroll software

The Pensions Regulator is the UK body that enforces workplace pension law. Its guidance for employers sets out what every employer with at least one worker must do, from assessing staff to paying contributions and telling TPR what happened.

The duties are not optional and not age-limited in the way many people assume. A worker aged between 22 and State Pension age, earning above the £10,000 earnings trigger, must be enrolled into a qualifying scheme. Others can ask to join, and you must handle that request.

This is where payroll software earns its place. A payroll system that only calculates pay and PAYE leaves the pension work to spreadsheets, and spreadsheets are where assessment errors, missed opt-ins and late contributions start.

TPR expects the employer to hold records that show what was assessed, what was paid and when. Software that stores an audit trail makes that straightforward. Software that does not turns a routine TPR query into a scramble.

The statutory basis sits in the Pensions Act 2008, which introduced the automatic enrolment duties and the compliance regime TPR operates. Other obligations on employers sit in the wider employment framework, including the Employment Act 2008. Any payroll system sold to UK employers should be built around those pension duties, not bolted onto them.

Payroll products that cover each duty

Most employers run payroll in-house or through a bureau, and either way the pension calculation depends on the payroll data. Hours, qualifying earnings, pensionable pay definitions and contribution rates all feed the same engine.

If the software cannot hold a pensionable pay definition separate from taxable pay, you will reconcile two figures every month.

UK employers commonly choose Sage Payroll, BrightPay, Xero Payroll, QuickBooks Payroll or IRIS. All five cover automatic enrolment in some form, but the depth differs by duty. BrightPay and Sage Payroll centre their pension modules on the per-period assessment and the enrolment letters. Xero Payroll and QuickBooks Payroll depend on their connections to pension providers to produce and send the contribution file. IRIS is widely used by bureaus and multi-scheme payrolls, where the declaration and re-enrolment figures have to come straight from the same payroll data. Pay Run Lab reviews each of these products, so check the pension coverage in the individual review rather than the sales page.

A selection checklist helps here, because the pension functions are rarely the headline feature on a supplier's website. They are usually buried in a help file or a support article.

Duty one: assessing and enrolling eligible staff

Assessment is the first duty and the one that drives everything else. Each pay period, you must work out which workers are eligible for automatic enrolment and which are not, based on age and earnings.

The earnings trigger and the qualifying earnings band change most years, usually from April. The trigger is £10,000 and the band runs from £6,240 to £50,270, the levels in force since the 2021/22 tax year and frozen in the reviews since. Your software should update these thresholds without you editing a table by hand, and it should show you which figures it used and for which tax year.

Eligible jobholders must be enrolled into a qualifying pension scheme. Non-eligible jobholders have the right to opt in, and entitled workers can join a scheme you choose to offer. Each group has different rules and different letters.

Postponement adds another layer. You can delay assessment for up to three months for some workers, but you must tell them in writing and you must still assess them when the period ends.

The assessment output you should expect

A working payroll system produces an assessment result per worker per pay period, with the reason. That reason matters when a worker asks why they were not enrolled, or when TPR asks you to demonstrate the decision.

If your software only shows a pension deduction on the payslip, you cannot reconstruct the assessment later. Ask the supplier where the assessment report lives before you buy.

Enrolment and opt-in handling

Once assessed, the software should generate the enrolment or opt-in record, the statutory letter to the worker and the joiner file for the pension provider. Manual rekeying between these steps is where deadlines slip.

Opt-outs must be processed within the statutory window, and any contribution taken before the opt-out is refunded. Software that tracks the opt-out clock prevents you refunding too late or too little.

Duty two: calculating and paying contributions on time

Contribution calculations depend on the pensionable pay definition in the scheme rules, not just gross pay. Some schemes use qualifying earnings, some use basic pay, and some use total earnings.

The minimum contribution rates are set by law. The total minimum is 8% of qualifying earnings, made up of 5% from the worker and 3% from the employer, and those rates have stood since April 2019. The employer must pay at least 3%, and the worker's share comes from their pay unless the scheme uses a different method.

Tax relief is applied at source for most schemes, which means the worker's net contribution is lower than the headline rate. Your software needs to handle relief at source correctly or the provider will reject the file.

Payment deadlines are strict. Contributions deducted from pay must reach the scheme by the 22nd of the following month in most cases, or the 19th if you pay by cheque. Late payment is a breach even if the amount is correct.

TPR's Contributions, dashboards, data and transfers guidance explains what trustees and administrators expect from the data they receive. Poor data causes rejected files, and rejected files cause late contributions.

Where contribution errors come from

Most errors come from three places: a pensionable pay definition that does not match the scheme, a rate change applied to the wrong pay period, and a joiner or leaver processed outside the pension cycle.

A fourth source is rounding. If the software rounds each worker's contribution differently from the provider's system, the totals will not match and the file will fail.

A payroll quality checklist is useful here because it forces a reconciliation step before submission rather than after.

Steps to run a clean contribution cycle

What late payment triggers

Late or unpaid contributions are one of the breaches TPR acts on most quickly, because the money belongs to the worker. TPR can issue an unpaid contributions notice and, if the money is still not paid, escalate.

The Warnings, notices and payment of fines page sets out the escalation path, from a compliance notice through to a fixed penalty of £400 and then a daily rate of between £50 and £10,000 depending on the number of workers.

Software that flags an approaching deadline and an unreconciled file is worth more than software that simply stores a rate. The flag is what stops the breach.

Duty three: declarations, re-enrolment and record keeping

A declaration of compliance tells TPR what you did. You must complete one within five months of your duties start date, through TPR's online declaration of compliance service, and again after each re-enrolment cycle.

The declaration covers the scheme you used, how many workers you enrolled and how many you did not. It is a legal statement, so the figures must match your records.

Re-enrolment is the duty employers forget. Roughly every three years, you must re-enrol eligible workers who opted out or left the scheme, and then complete a re-declaration.

TPR's Re-enrolment and re-declaration guidance explains the timing, including the window for choosing your re-enrolment date and the deadline for the re-declaration.

Record keeping duties

You must keep records that show your compliance, and the retention periods differ by record type. Contribution records must be kept for at least six years, and opt-out notices for at least four. Assessment and enrolment records have their own retention rules.

Records must be retrievable, not just stored. If TPR asks for evidence of an assessment from two years ago, you need to produce it quickly.

Software that keeps a dated audit log does this well. Software that overwrites the current period with the next one does not, and you will not discover that until you need the history.

The re-declaration cycle

Re-declaration is a separate submission from the original declaration, and it has its own deadline. Missing it is a breach even if every contribution was paid correctly.

A worked example helps. Suppose your duties start date was in 2023. Your first re-enrolment window opens around the third anniversary, you choose a re-enrolment date within the window, re-enrol eligible staff, then submit the re-declaration within five months of that date.

The software should prompt the cycle, calculate the re-enrolment date options and generate the re-declaration figures. It should not decide the date for you, because the choice affects who must be re-enrolled.

Software functions that automate each duty

Not every payroll system covers all three duties to the same depth. The table below maps the duty to the function you should look for, and to the question worth asking a supplier.

Integration with the pension provider

Most providers accept a standard contribution file, but the format and the timing differ. Some want the file before payday, some after, and the cut-off affects your payment date.

Software with a tested integration removes the manual upload. Software without one means someone exports, checks and uploads every period, which is a single point of failure.

Ask whether the integration is maintained by the supplier or by the provider, and what happens when the provider changes its file format. The answer tells you how much of the work stays with you.

Reporting and audit trails

The reports you need are the assessment report, the contribution reconciliation and the declaration extract. If the software cannot produce all three without a custom build, the pension work will sit partly outside the system.

Audit trails matter for TPR queries and for your own year-end checks. A dated log of who changed a rate, when, and why is the difference between a quick answer and a long investigation.

A map of the rules helps you see where pension duties sit alongside PAYE, National Minimum Wage and data protection obligations, because they interact.

How a clean pension cycle runs

A clean pension cycle runs without a spreadsheet: assessment happens in the pay run, the contribution file reconciles automatically, and the declaration figures come from the same data. Any step that still needs a manual export will be missed eventually, which is why the software should close that gap.

Where software support ends and employer responsibility begins

Software can assess, calculate, generate files and prompt deadlines. It cannot take the legal risk, which stays with the employer.

The employer chooses the qualifying scheme, sets the pensionable pay definition, decides the postponement policy and signs the declaration. Those decisions sit outside any payroll product.

The employer also owns the data. Under UK data protection law, the Information Commissioner's Office regulates how worker data is held, and pension records are personal data. The software is a tool, not a data controller.

The checks that stay with you

Someone in your organisation must confirm the rates, the thresholds and the declaration figures before submission.

That person also needs the escalation path for a compliance notice and the deadline for a reply. Ignoring a TPR notice makes the position worse.

Choosing software with the duties in mind

Buy for the duty you find hardest, not the feature the sales page leads with. If re-declaration is your weak point, test the re-enrolment workflow before you sign.

Ask for a demonstration using your own pay groups and pensionable pay definitions. A generic demo will not show whether the assessment handles your edge cases, such as workers with variable hours or multiple jobs.

Check whether the supplier tracks regulatory changes and issues updates, and how it tells you when a threshold changes. That ongoing maintenance is a large part of what you are paying for.

Finally, check the supplier's status at Companies House if you are committing to a multi-year contract. It is a small step that avoids a large problem.

Common questions