How much do employers need to contribute under auto-enrolment?

Under the new pension auto-enrolment scheme, the employee, the employer and the government will all pay a certain amount into the employee’s pension fund.

 

Employer Contributions under auto-enrolment

As an employer you will need to match the contributions made by your employees.

The amount an employee pays will be a set rate of their annual salary. Employers will match the contributions (the government will contribute an additional amount). Employees cannot pay more or less than the set rate.

The employer and employee will pay 1.5% of the employee’s annual salary into the pension in the first year. This will increase to 6% by year 10.

The table below sets out the rates you, your employee and the government will pay:

 

Year	Employee Contribution Rate	Employer Pays	Government Pays
1 to 3	1.5%	1.5%	0.5%
4 to 6	3%	3%	1%
7 to 9	4.5%	4.5%	1.5%
10 and after	6%	6%	2%

 

Both an employer’s and the government’s contributions are capped at €80,000 gross annual salary.

For the first 3 years, the maximum amount an employer will contribute is €1,200 a year i.e., €80,000 x 1.5% is €1,200.

If an employee’s salary is greater than €80,000, an employee can still contribute but the employer or the government won't match the contributions on any income over €80,000.

Employer contributions to this scheme will be tax deductible.
 

Planning for pension auto-enrolment

The first enrolments under the auto-enrolment scheme are on 30th September 2025. Although the scheme may be delated it is important to prepare early to help your business stay compliant and avoid potential penalties.

 

 

First published 30 Jan 2025 | Last updated 15 Apr 2025

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