These FAQs are for financial advisers only. They mustn’t be distributed to, or relied on by, customers. They are based on our understanding of legislation at the date of publication.Fri Aug 26 09:42:49 BST 2016 Back to results
It’s not practical for all employers to automatically enrol their eligible jobholders on the same day due to the administration burden on providers. So, each employer is given their own date on which they will become subject to the auto enrolment duties. This is referred to as the employer’s staging date.
The staging date is set in legislation and is usually based on the number of people in an employer’s largest PAYE scheme or the last two characters of their PAYE reference, if their PAYE scheme had fewer than 30 persons in it as at that date.
Employers can find out their staging date here. They will need to know their PAYE reference.
Subject to an exception for ‘small employers’ (see below), the employer’s PAYE scheme size is determined by the information available to the Pensions Regulator (tPR) on 1 April 2012.
An employer’s PAYE scheme size may include ex-employees and pensioner members who are paid through the PAYE scheme. Except where the ‘small employer’ provisions apply, the staging date for an employer whose PAYE scheme size is artificially boosted by ex-employees and pensioner members will be determined by including those ex-employees and pensioner members.
If, for any reason, an employer has more than one PAYE scheme, then the earliest staging date applying across those schemes will apply to all.
Employers under a multi-employer PAYE scheme, i.e. where more than one employer uses the same PAYE scheme, will all have the same staging date based on the total size of the PAYE scheme, subject to an exception for ‘small employers’.
A ‘small employer’ means an employer who, on 1 April 2012:
- had fewer than 50 workers, and
- had, or was part of, one or more PAYE schemes in which there were 50 or more persons.
This includes an employer who, on 1 April 2012, had fewer than 50 workers and who on that date:
- was part of a larger, multi-employer PAYE scheme, or
- whose PAYE scheme(s) contained 50 or more persons because it/they included non-workers (for example, past employees being paid a company pension through payroll).
These ‘small employers’ have a choice of staging date. They can either:
- retain the staging date determined using the larger PAYE scheme(s), in which case they can also choose an earlier staging date, or
- choose a later date which will be in the period 1 August 2015 to 1 April 2017 (depending on when the original staging date falls). Early staging is not available where the later date is selected.
The employer does not need to tell tPR in advance which of the dates they intend to use. However, it may be wise to do so as they can expect to receive reminder communications from tPR if registration is not completed at the original staging date.
A ‘small employer’ who, on 1 April 2012, was part of a larger multi-employer PAYE scheme choosing a later staging date has no impact on the other employers in that scheme – they keep the original staging date.
Four companies are part of a single PAYE scheme that on 1 April 2012 had 260 people in it. Under the staging timetable, the staging date for the employers in this PAYE scheme was 1 February 2014.
However, one of the companies was a ‘small employer’, having had 22 workers on 1 April 2012. The ‘small employer’ could have chosen to stage at the same time as the other employers in the PAYE scheme – 1 February 2014 – or could choose to stage on 1 July 2016. Whichever option the ‘small employer’ chose, the other three employers will still stage on 1 February 2014.
New employers, who first pay PAYE for a worker during 1 April 2012 to 30 September 2017 inclusively, will have a staging date between 1 May 2017 and 1 February 2018. Their staging date is based on the date the employer first pays PAYE in respect of any worker as opposed to PAYE scheme size.
New employers, who first pay PAYE for a worker on or after 1 October 2017, will be subject to the auto enrolment duties immediately.
Employers can choose an earlier staging date than the one set out in legislation. This effectively brings forward the date when the new employer duties start to apply to them. If an employer has more than one PAYE scheme, choosing an early staging date will apply to all such schemes (subject to the exception for ‘small employers’).
The early staging date chosen must correspond to one of the existing staging dates (from 1 October 2012) except where, at the date the employer tells the Pensions Regulator that they are bringing their staging date forward, the employer has no eligible jobholders who would have to be automatically enrolled on the early automatic enrolment date.
The conditions that must be met before an earlier staging date can apply are that the employer has:
- contacted a pension scheme that could be used to comply with the new duties
- secured the agreement of the trustee or manager (or scheme administrator or provider) of the scheme that is to be used to comply with the employer’s duties from the early staging date
- notified tPR in writing about this, at any time before the earlier staging date falls (i.e. one day before the early automatic enrolment date).
If the employer has no eligible jobholder who would have to be auto enrolled on the early automatic enrolment date, the early automatic enrolment date can be any date before the staging date listed for the employer in the legislation (this means the early staging date will not have to be the first day of a month). In this situation, the employer will not have to have an agreement in place with the trustee or manager (or scheme administrator or provider) of a pension scheme before the earlier date.
Except for ‘small employers’ as described above, a later staging date cannot be chosen. However, employers can postpone the assessment of workers and/or the auto-enrolment date of their eligible jobholders by up to three months by using a waiting period. Further information can be found under our Postponement FAQs.
Further information on staging can be found at:
Pensions Technical Services