What is Auto Enrolment Pension?
Auto-enrolment pension is a new Irish retirement savings scheme starting 1 January 2026. If you’re aged 23 to 60, earn €20,000 or more, and aren’t in a pension plan, you’ll be automatically enrolled — no forms or provider choices needed. Employees, employers, and the State all contribute, helping workers save steadily for retirement.
Who Will Be Automatically Enrolled?
All workers in Ireland who:
- Are aged between 23 and 60
- Earn more than €20,000 annually
- Are not currently paying into a workplace or private pension
Employers will be legally obligated to enrol all eligible employees and manage their contributions via payroll from 2026. Learn more from Auto-Enrolment: Your Questions Answered.
How Will Contributions Work?
While initially set at 1.5%, every €3 deducted from an employee will be matched by the employer and topped up by a further €1 Government contribution, totalling €7 saved. Contributions will be based on gross pay.
Contribution Rates:
- Years 1 to 3: 1.5% Employee, 1.5% Employer, 0.5% State
- Years 4 to 6: 3% Employee, 3% Employer, 1% State
- Years 7 to 9: 4.5% Employee, 4.5% Employer, 1.5% State
- Year 10+: 6% Employee, 6% Employer, 2% State
For a more detailed explanation of how the Auto-Enrolment contribution structure works, the DSP Employee Information Guide provides a helpful breakdown.
Under the new system, employees will begin contributing 1.5% of their gross pay between 2026 and 2028. This rate will rise to 3% from 2029 to 2031, 4.5% from 2032 to 2034, and finally 6% from 2035 onwards. Employers will match these rates, while the government will also contribute — starting at 0.5% and increasing by 0.5% in each phase to reach 2%.
This gradual increase is designed to minimise disruption while building strong long-term retirement savings. The DSP guide also outlines how contributions will be calculated, handled, and scaled over time.
Can Employees Opt Out?
Employees may choose to opt out during:
- Months 7 and 8 after initial enrolment
- Months 7 and 8 following a contribution rate change
If still eligible, they will be automatically re-enrolled after two years.
When Does Auto-Enrolment Start?
Auto-Enrolment officially begins on 1 January 2026. Employers do not need to take action right now — but they should start preparing systems, communications, and internal policies.
Please note: Big Red Cloud will include Auto-Enrolment functionality in our Payroll 2026 release, expected in December 2025. This will ensure your payroll software is ready in time for January 2026 pay runs.
What Should Employers Do Now?
While the National Automatic Enrolment Retirement Savings Authority (NAERSA) will identify and enrol eligible employees, employers should begin preparing for the Auto Enrolment Pension scheme now to ensure a smooth transition:
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Assess Financial Implications: Estimate the potential cost of employer contributions under the new scheme. This will help you understand the long-term financial impact on your business.
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Review Current Pension Schemes: If you already offer an occupational pension scheme, check if it meets the exemption criteria. To qualify, the scheme must be open to all eligible employees and meet minimum contribution standards. You can find guidance on this from the Pensions Authority.
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Seek Professional Advice: Speak with your accountant or pension advisor to evaluate the pros and cons of staying with an occupational scheme versus participating in the Auto Enrolment Pension system. Their advice can help you make informed, cost-effective decisions.
By taking these steps now, employers can prepare confidently for the changes ahead in 2026. The government has provided detailed resources, including a YouTube playlist on Auto-Enrolment, with explainers and webinars.
Big Red Cloud – Making Auto-Enrolment Simple
At Big Red Cloud, we aim to make Auto-Enrolment as simple as possible. As one of Ireland’s most trusted names in cloud accounting and payroll, we’re actively preparing our solutions to support Auto-Enrolment. Our Cloud Accounting Software and Cloud Payroll Software are designed to streamline day-to-day operations while supporting compliance with Irish legislation. Payroll 2026 will include Auto-Enrolment submission and reconciliation utilities, ensuring readiness before the rollout date.
Whether you’re a small business, accountant, or operating in retail, hospitality, agriculture, education, or construction — Big Red Cloud has tailored accounting solutions to match your needs. We also offer integrations such as GoCardless for automated payment collection and Turbo Inventory for stock management.
Later this year, we plan to run a free Auto-Enrolment webinar to walk Irish employers through what to expect and how to prepare. For more information, email us at info@bigredcloud.com or call +353 12048300.
