What employers need to know and how to prepare with confidence

Auto Enrolment (AE) is one of the biggest payroll and HR changes Ireland has ever introduced. Set to go live on 1st January 2026, the new system aims to ensure more workers have access to retirement savings – whether or not their employer already offers a pension scheme.

While the intention is simple, the operational impact is significant. Payroll processes, employee communication, compliance checks, and reporting obligations will all change. And with penalties for non-compliance, employers need to be ready well before the go-live date.

Below is a clear, practical guide to what Auto Enrolment means, how it will work, and how Fitzgerald Power can help you prepare with clarity and confidence.

What is Auto Enrolment?

Auto Enrolment, or the My Future Fund, is a mandatory retirement savings system for employees who meet certain criteria and are not already in a qualifying pension scheme.

It is based on a Defined Contribution model and will be administered by the National Auto-Enrolment Retirement Savings Authority (NAERSA).

NAERSA will:

  • Determine employee eligibility
  • Notify employers when an employee must be enrolled
  • Collect employee and employer contributions
  • Apply the State top-up
  • Manage each employee’s single “pension pot for life”
  • Provide an online portal for employers and employees

Employers won’t decide eligibility – NAERSA does. Employers simply apply the instructions.

Which employees will be enrolled?

  • Are aged 23 to 60,
  • Earn €20,000 or more per year across all employments, and
  • Are not in an exempt employment (i.e. already contributing to an occupational pension, PRSA, PEPP, RAC, AVC or ASC via payroll).

Important points:

  • Eligibility is reviewed weekly based on payroll submissions.
  • There is no waiting period – if the criteria are met, enrolment happens.
  • Multiple employments are assessed independently.
  • Income outside payroll (e.g., private PRSA payments) does not affect eligibility.

Employees who do not meet the criteria can still opt in if they are aged 18–66 and the employment is not exempt.

Employer responsibilities

Once NAERSA issues an Auto Enrolment Payroll Notification (AEPN), employers must:

  1. Notify the employee of their enrolment
  2. Begin deductions from the next payday
  3. Calculate employee and employer contributions based on gross pay
  4. Deduct the employee amount from net pay
  5. Remit both contributions to NAERSA by 6.30pm on payday
  6. Apply all future instructions (opt-outs, suspensions, re-enrolment, rate changes)

There is no exception for employers in financial difficulty, and contributions cannot be delayed.

Failure to comply may result in:

  • Compliance notices
  • Fixed payment penalties up to €5,000
  • Interest charges
  • Possible criminal prosecution for serious or repeated non-compliance

This system is designed to be fully electronic, meaning payroll software must be AE-ready.

Contribution rates and how they work

Contributions are calculated as a percentage of gross pay (up to an annual limit of €80,000). AE includes:

  • Employee contribution
  • Employer contribution
  • State top-up of 33⅓% of the employee contribution

Employees are automatically enrolled for six months before they can opt out. They may also suspend contributions later for up to two years.

Situations where a 0% contribution rate applies:

  • Opt-outs
  • Suspensions
  • AEL (earnings limit) breach
  • Exempt employment
  • Retirement, death or enrolment error

The new employer portal

From December 2025, all employers must register on the NAERSA employer portal – even if they currently have no eligible employees.

Registration involves:

  • Accepting terms
  • Completing employer details
  • Setting up payment methods (Direct Debit or card)
  • Ensuring ROS digital certificate access

Failure to register may lead to immediate compliance action.

The portal will be the hub for:

  • Downloading AE notifications
  • Uploading contribution files
  • Correcting errors (within strict deadlines)
  • Viewing reconciliations
  • Managing leavers and starters

Common payroll scenarios employers must be ready for

AE affects payroll far beyond simple contributions. Employers will need processes for:

New starters

NAERSA checks eligibility using a 13-week lookback. Enrolment may happen quickly.

Leavers

Employers must submit a cessation date, and any payments within 12 months may still trigger AE contributions.

Overlapping contributions

If an employee joins the company pension mid-year, AE may still apply for one or more pay periods until NAERSA issues a 0% AEPN.

Insufficient net pay

If net pay can’t cover the employee contribution, employers must deduct what they can, flag the shortfall, and recover it in the next payroll using specific reason codes.

Corrections

Only possible until 6:30pm on payday – after that, NAERSA begins fund collection.

Tax considerations

  • Employees do not receive standard tax relief – the State top-up replaces it.
  • Employer contributions are tax-deductible and not a taxable benefit.
  • Funds grow tax-free.
  • Lump sums at retirement follow standard pension lump-sum rules.

Investment options will include low, medium and high-risk funds, with a default “lifestyling” model.

How Fitzgerald Power can help you prepare

Auto Enrolment will reshape payroll across Ireland, and businesses that prepare early will be in the strongest position.

Fitzgerald Power can help you:

  1. Understand exactly how AE affects your business

We translate the complex rules into practical steps tailored to your operations, workforce structure, and payroll cycles.

  1. Assess payroll readiness

We review your systems and processes to ensure they can handle AE notifications, calculations, remittances and compliance checks.

  1. Support employee communication

Employees will have questions – we help you prepare clear, accurate messaging based on NAERSA guidelines.

  1. Manage the transition smoothly

From handling tricky edge cases to implementing contribution workflows, we ensure your payroll runs cleanly from day one.

  1. Stay compliant and confident

With penalties for errors, late submissions and incorrect deductions, professional oversight provides peace of mind.

  1. Provide ongoing support

AE isn’t a once-off setup. Contribution rates rise over time, employees opt in/out, and NAERSA instructions evolve. We stay on top of it so you don’t have to.

Preparing now means less stress later

With the go-live date approaching, every employer – even those with existing pension schemes – should begin preparing. Auto Enrolment is detailed, technical, and administrative heavy, but the good news is you don’t need to manage it alone.

Fitzgerald Power is here to help you navigate every step so your business is ready, compliant, and confident ahead of implementation.