Are Director Payrolls Exempt from Auto Enrolment?

Director payrolls have been subject to numerous conversations by accountants, payroll administrators, financial advisers and payroll software providers since the introduction of Automatic Enrolment Pensions.

For a long time it was believed that only single director companies would be exempt from work placed pension duties as long as they communicated their position with the Pensions Regulator in line with the declaration of compliance deadline.

However earlier this month The Pensions Regulator released a very informative video on Automatic enrolment duties for director only companies.

If you process any director payrolls for a sole director or a director only businesses this video is essential viewing.

Automatic enrolment duties don’t apply when a company or individual are not considered an employer therefore you won’t have any duties if you meet one of the following criteria:

  • you’re a sole director company, with no other staff
  • your company has a number of directors, none of whom has an employment contract
  • your company has a number of directors, only one of whom has an employment contract

If you company falls into any of these categories contact the Pensions Regulator and let them know that you are exempt. This will avoid you having to register with a pension scheme and submit a declaration of compliance.

If circumstances change and you no longer meet the above criteria then you need to communicate your position with the Pensions Regulator.

More information, including the link for letting the Pensions Regulator know about your exempt status, can be found here.

Simon Wells

Business Development at Qtac Software & Outsourcing
Simon Wells has extensive understanding of the payroll process and has been working at Qtac prior to the introduction of Real Time Information and Automatic Enrolment Pensions. With experience in outsourced payroll services Simon has a unique understanding of payroll processing within a bureau environment.
Simon Wells