Irish pension auto-enrolment: A complete guide for employers

As of 1 January 2026, Ireland’s Automatic Enrolment Retirement Savings System (“MyFutureFund”) is live. If you employ people in Ireland, it applies to you.

It’s a big shift. For the first time, employers are required to contribute to a pension scheme for eligible employees, with the State topping up contributions alongside. The goal is simple. To help more people in Ireland retire with financial security.

For employers, that means new costs, new payroll processes, and new compliance obligations. This guide breaks down what you need to know and, more importantly, what you need to do.

Your employees will be automatically enrolled if they:

• Are aged between 23 and 60
• Earn €20,000 or more per year (assessed using a 13-week lookback period)
• Aren’t already contributing to a qualifying pension scheme through payroll
• Are subject to Irish PAYE

Employees aged 18-23 or 60-66 can voluntarily opt in, and if they do, you’ll have the same contribution obligations towards them.

Contributions are calculated on all gross earnings (including bonuses, overtime, and taxable benefits) up to €80,000 per year.

For every €3 an employee contributes, you match it with €3, and the State adds €1. That’s €7 into their pension pot for every €3 from their pay.

At full implementation, your maximum contribution per employee is €4,800 per year (6% of the €80,000 maximum earnings cap).

At the current cap, the maximum an employer will ever have to contribute for a single high-earning employee (earning €80,000 or more) is:

• In 2026: €1,200 per year.
• By 2035: €4,800 per year.

Make sure your Finance, HR, and Payroll departments are using the total gross pay (up to €80k) for all calculations.

Employees who are already contributing to a qualifying pension scheme through payroll are exempt from auto-enrolment into MyFutureFund.

Qualifying schemes include occupational pension schemes, Personal Retirement Savings Accounts (PRSAs), Trust Retirement Annuity Contracts (RACs), and Pan-European Personal Pension Products (PEPPs).

For your existing scheme to qualify employees for exemption, it must meet minimum contribution requirements. These are at least 3.5% of gross pay in total contributions, with at least 1.5% coming from the employer. Non-contributory schemes remain unaffected provided the employer contribution is at least 3.5%.

If your scheme doesn’t meet these standards, your employees will be auto-enrolled into MyFutureFund regardless of their existing pension membership.

Employee consent is required for enrolment into pension schemes unless enrolment is expressly provided for in the employee’s contract.

The Department of Social Protection has flagged concerns about employers enroling staff without explicit consent, even in non-contributory schemes. If you’ve been automatically enrolling employees into your pension scheme without a clear contractual basis, it’s time to review your approach.

If employees don’t consent to join your existing scheme, they’ll be auto-enrolled into MyFutureFund. This means you could end up running two parallel pension arrangements (your own scheme for some employees, and MyFutureFund for others).

That’s administratively complex and worth avoiding if you can. Consider whether it makes sense to extend your existing scheme to all employees, remove waiting periods that might see new hires auto-enrolled before they’re eligible for your scheme, and ensure your employment contracts clearly provide for pension enrolment.

The definition of “exempt employment” only covers contributions made through payroll to an Irish-approved occupational pension scheme, a qualifying PRSA, or a qualifying PEPP.

Foreign pension arrangements don’t generally qualify unless you’ve obtained formal approval from Irish Revenue. Revenue will consider approving foreign schemes where the provider is established in another EU Member State or the United Kingdom, but the scheme must meet specific conditions.

For example, if you’re a US company with an employee in Ireland who participates in your 401(k), that employee will still be auto-enrolled into MyFutureFund unless you’ve secured Revenue approval for your US scheme (which is unlikely) or the employee isn’t subject to Irish PAYE.

A1 certificates and PRSI Class M: Employees on assignment to Ireland who hold an A1 certificate (or equivalent certificate of coverage) are generally exempt from Irish social security. They’re recorded at PRSI Class M, and employees subject to PRSI Class M are not subject to auto-enrolment for the duration of that coverage.

Short-term visitors: Employees spending less than six months in Ireland in a tax year may be excluded from Irish payroll withholding if a PAYE dispensation has been obtained from Revenue. No PAYE means no auto-enrolment. But you need to apply for that dispensation proactively.

Employees remaining on foreign payroll: If an assignee remains on a foreign payroll and isn’t subject to Irish PAYE, NAERSA won’t have access to their payroll data, and they won’t be enrolled.

If you’re a foreign employer operating payroll taxes in Ireland, you’re subject to auto-enrolment obligations. You’ll need to register on the employer portal, action AEPNs, and remit contributions just like any Irish employer.

If you operate tax equalisation policies for assignees, auto-enrolment contributions will increase your assignment costs. The employer contribution is an additional expense, and depending on your policy structure, the employee contribution may also flow through to you.

Employees can opt out, but not immediately. They must stay enrolled for at least six months. Between months six and eight, they have a two-month window to opt out.

If they opt out:

• Their own contributions are refunded
• Employer and State contributions stay in their pot
• After two years, they’re automatically re-enrolled
• The cycle repeats

You cannot prevent employees from joining the scheme. You cannot force or encourage employees to opt out or suspend contributions. You cannot penalise employees for participating.

Employers who do any of these things may be prosecuted and will be subject to fines and penalties. NAERSA will publish a list of employers convicted of non-compliance.

For less serious offences, there are fixed penalties of up to €5,000. For more serious breaches, fines can reach €50,000, with potential imprisonment of up to three years.

Specific offences include:

• Failing to pay contributions when due
• Making false statements to reduce employer contributions
• Preventing employees from joining
• Encouraging opt-outs
• Failing to notify employees of their enrolment

Underpaid or late contributions attract interest at a daily rate of 0.0274%. And beyond the financial penalties, there’s reputational damage, since NAERSA will publish the names of non-compliant employers.

Ireland introduced auto-enrolment because roughly 750,000 private sector employees had no workplace pension coverage. They were heading towards retirement with only the State Pension, currently around €15,000 per year, hardly enough to maintain anyone’s standard of living.

The demographic reality is stark. By 2050, Ireland will go from four workers for every person over retirement age to just two. The system needed to change.

For employers, this means a new permanent cost and a new compliance obligation. But it also means your employees in Ireland are building towards a more secure retirement. That’s worth something.