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Since automatic enrolment was implemented, most employers are obliged to enrol employees meeting certain conditions within a pension scheme unless the employee opts out. See the Automatic enrolment ― overview guidance note).

Contributions in respect of individual employees may be made by the employer to an occupational scheme or to a personal pension scheme.

Such contributions are free of tax and NIC. Many employers offer a salary sacrifice arrangement so that employees forfeit part of their salary and, in exchange, the employer makes an increased pension contribution. For employees, this will save tax and NIC on the salary they would otherwise receive. Where this replaces a personal contribution by the employee, they will save NIC at the appropriate rate (see the Overview of NIC Classes, rates and thresholds guidance note) depending on their level of earnings on these contributions to the pension. Given that the employer would pay secondary Class 1 NIC on the salary that the employee would use to make the pension contributions on their own behalf, there is also an incentive for