FOR many local employers, managing payroll and staff benefits is already a balancing act.
But with the Government’s new Auto-Enrolment (AE) pension scheme starting in January 2026, there’s a fresh layer of responsibility on the horizon.
And like cashflow, how you prepare today can make all the difference tomorrow.
Auto-Enrolment is designed to boost retirement savings across Ireland—but it places new financial obligations on businesses.
If you have employees aged 23 to 60 earning over €20,000 a year and not already in a pension, you’ll be required to enrol them in the AE scheme automatically.
The cost? For every €3 your employee contributes, you’ll match that with €3, and the State adds €1. Contributions start at 1.5% of gross salary and will rise to 6% over a decade.
It’s a long-term commitment, and the earlier you begin planning for it, the smoother the transition will be.
Start by reviewing your payroll structure and estimating the cost of these contributions over the next few years.
Consider your staff mix - how many will qualify? What will this look like in Year 1, Year 5, or Year 10? Much like cashflow planning, modelling these costs early helps you avoid surprises and make informed staffing or budget decisions.
But AE isn’t the only path. Before defaulting to the State scheme, it’s worth exploring if a private occupational pension or PRSA might be a better fit.
These offer more flexibility, additional voluntary contributions (AVCs), early retirement options, and tax relief of up to 40% for employees - compared to AE’s 25% top-up.
For businesses wanting to reward or retain key staff, a tailored pension plan may prove more effective. Equally important is communication.
Let your team know what’s coming, how it affects them, and what choices they may have.
A well-informed workforce is easier to support, and more likely to appreciate the value of long-term planning.
The best outcomes happen when you plan early, run the numbers, and get advice.
Auto- Enrolment may seem like a distant deadline, but January 2026 is just around the corner.
If you’re unsure where to start, or want to explore your options, talk to your accountant.
Reach out to Peter and our team in Bandon on 023 884 1785 or visit www.ifac.ie
