Payroll is ready for auto-enrolment but what about contracts?

With auto-enrolment due to kick off in January 2026, the focus so far has centred on the impact on payroll. This makes sense, but it’s not the whole picture, writes Emma Richmond

A pen writing on paper

When pension auto-enrolment is discussed, the focus usually falls on payroll. Numbers, contributions and deadlines dominate the conversation.

However, payroll is only half the story.

Behind every payslip lies a contract—the legal foundation of the employer-employee relationship. If contracts are not updated in time, employers risk disputes, confusion or even legal challenge. Payroll may capture the numbers, but the contract is what governs the relationship.

Contracts under the microscope

Auto-enrolment alters the employer-employee relationship in a way that must be reflected in documentation. Clear, updated contracts mean employees know exactly what contributions will be made, when, and under what conditions. Contracts also give employers protection, ensuring they are not exposed if a dispute arises.

Accountants have a key role to play in preparing clients for January 2026. Beyond payroll adjustments, they should encourage them to ask whether their contracts:

  • Contain up-to-date provisions on pension contributions;
  • Accurately describe the opt-out process in line with legislation;
  • Reflect the scheme’s eligibility criteria on age and earnings;
  • State employer obligations precisely, including matching contributions; and
  • Align with any existing pension scheme so there is no duplication or inconsistency

Put simply, the questions are straightforward: are contributions clearly stated? Is the opt-out process correct? Do the terms reflect eligibility criteria? Are employer obligations precise? And is the wording consistent with other schemes?

Best practice

Contract updates should not be left until late 2025. It takes time to review, amend and update these documents. Leaving it to the last minute adds unnecessary pressure and increases the risk of errors. The necessary updates extend beyond wording. Contracts must also be supported by:

  • Consistency. Handbooks and HR policies must match the contract wording.
  • Record-keeping. Keep dated copies of updates and communication to employees.
  • Clear communication. Employees should understand the changes in plain, straightforward language.
  • Collaboration. Accountants, HR teams, and employment law specialists should work together to ensure the process is watertight.
  • Educate directors and partners. Senior leadership often assumes payroll captures everything. Contracts form the legal backbone and must not be overlooked.

Accountants are already central to preparing payroll systems and advising on financial impacts. By bringing contract updates into the client conversation, you can highlight a major compliance area that may otherwise be missed.

Reducing risk and giving certainty

Payroll will always take centre stage in discussions about auto-enrolment but the contracts behind it are equally important. Accountants who highlight this now give their clients a significant advantage ahead of January 2026.

The sooner contracts are updated, the smoother the transition will be. This is about reducing risk for employers and giving employees certainty.

Emma Richmond is Managing Partner and Employment Law Partner at Whitney Moore