What it is
Auto-enrolment is a new State-run pension savings scheme called MyFutureFund. Employees who are not already in a workplace pension are enrolled automatically. The employee, the employer and the State all pay in. It is run by the National Automatic Enrolment Retirement Savings Authority (NAERSA).
By February 2026, more than 763,000 employees working for around 104,000 employers had been enrolled.
Which employees are covered
- Aged 23 to 60
- Earning more than €20,000 a year across all their jobs
- Not already in a workplace pension scheme that is paid through payroll
You do not decide who is enrolled. NAERSA works this out from your payroll submissions to Revenue and tells you which employees are in.
Not covered: the self-employed, and company directors who own a controlling share of the company and pay Class S PRSI. Employees outside the age or earnings limits can choose to join.
How much it costs
Contributions are a percentage of the employee's gross pay, including overtime, bonuses and taxable benefits, up to a maximum salary of €80,000.
| Years | Employer | Employee | State |
|---|---|---|---|
| 1 to 3 (2026 to 2028) | 1.5% | 1.5% | 0.5% |
| 4 to 6 | 3% | 3% | 1% |
| 7 to 9 | 4.5% | 4.5% | 1.5% |
| 10 onwards | 6% | 6% | 2% |
Example: for an employee earning €40,000 a year, you pay €600 a year in years one to three. The employee also pays €600, and the State adds €200.
Your contributions as an employer are deductible for corporation tax. Employees do not get tax relief on their contributions. Instead, the State adds its top-up.
What employers must do
- Run payroll through Revenue as normal. NAERSA uses this data to identify eligible staff.
- Act on the notices you receive. NAERSA sends you a notice for each enrolled employee.
- Deduct and pay contributions. Calculate the employee and employer amounts and pay them over with each payroll run.
- Show the deduction on payslips.
- Keep records in case of inspection.
Most payroll software now handles the calculations, but you still need to check that each employee's status is right.
Opting out
Employees cannot opt out in their first six months. They can opt out in months seven and eight, and get their own contributions back. Your contributions and the State's stay in their pension pot. Anyone who opts out is automatically re-enrolled after two years if they are still eligible.
Do not encourage staff to opt out. Pressuring or inducing an employee to opt out is an offence, with fines of €5,000 to €50,000. You can share neutral information, but the choice must be the employee's.
Penalties
- Administrative failures can bring a €5,000 fixed penalty and a compliance notice.
- Unpaid contributions must be paid with interest, plus compensation to the employee.
- Serious breaches can lead to fines of up to €50,000 and prosecution.
If you already have a company pension
Employees in an existing workplace scheme paid through payroll are exempt for now. From year seven, existing schemes must meet NAERSA's minimum standards to keep that exemption, so check your scheme before then.
We can run your payroll. We handle payroll, auto-enrolment deductions and Revenue submissions for small employers, including overseas companies with staff in Ireland. See our payroll services or contact us for a free consultation.