You have to register for pensions as an employer.
The employee then gets the relevant details sent to them, they then have to respond themselves to opt out. If they dont respond then they are auto enrolled.
Not sure what your “£500+vat” figure is but your contribution as an employer is 2%, the employees is 3%.
You can choose to contribute more if you so choose.
(The rates go up from April, employers contribution will be 3% I think )