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How should I prepare for Auto-enrolment?
I have a small business with 5 employees. I heard that auto-enrolment will be introduced later this year. What should I do to prepare?
Pension Auto-enrolment
The long-awaited pension auto-enrolment scheme is finally due to be introduced this year. Pension auto-enrolment is set to revolutionise workplace pensions in Ireland, ensuring more employees have access to retirement savings. For employers, this change brings significant responsibilities. Preparing early can help businesses stay compliant and avoid potential penalties.
What is Pension Auto-enrolment?
Pension auto-enrolment is a government initiative designed to increase pension participation among employees.
Under this system, employers must automatically enrol eligible employees into a pension scheme and contribute a percentage of their earnings. The employee and the government will also contribute to the pension.
Employees retain the option to opt out, but participation is encouraged to enhance financial security in retirement.
How should employers prepare for auto-enrolment?
1. Stay Informed
The first enrolments under the auto-enrolment scheme begin on 30th September 2025.
More information about the process is expected in the coming months and employers should try to keep abreast of new developments.
2. Budget for Employer Contributions
Under auto-enrolment employers will need to contribute to the employee’s pension fund. This increase in your costs will need to be considered when budgeting for the year.
The employer will match employee contributions. For the first year, the employee and employer will pay 1.5% of the annual salary (salary capped at €80,000), increasing to 6% by year 10.
3. Check your Payroll Systems
You need to check with your payroll provider that they can handle auto-enrolment. The system should be able to take instruction for enrolment, calculate and pay employee and employer contributions to the Central Processing Authority.
If you are doing your own payroll inhouse now might be the time to consider outsourcing the payroll function, and we at TaxAssist Accountants, can assist in that regard.
5. Employee Engagement
Many employees may have not opted in for existing employer pension schemes. More often than not the reason for this lack of uptake, is that these schemes are genuinely not compulsory and are offered purely on a voluntary basis.
As such, in the absence of any opt in to existing workplace pension schemes, these employees will be brought into auto-enrolment if no further action is taken in that regard.
6. HR
Employers should review employment contracts and handbooks for future employees.
Why Act Now?
Early preparation for pension auto-enrolment will not only ensure compliance but also demonstrate your commitment to employees’ financial well-being. By taking these proactive steps, Irish employers can navigate this significant change with confidence and ease.
We will continue to update our Pension Auto-enrolment Knowledge Hub on our website as new information becomes available to us.
Looking to outsource your payroll?
Contact TaxAssist Accountants for a free, no-obligation consultation.
Or contact usFrequently Asked Questions
Auto-enrolment is a new pension savings scheme for certain employees who are not already paying into a workplace pension. These employees will be automatically enrolled once the scheme commences. Under the scheme, the employee, the employer and the government will all pay a certain amount into the employee’s pension fund.
The first enrolments under the pension auto-enrolment scheme will begin on 30th September 2025.
At a minimum, employer contributions will be at least 1.5% of the employee’s salary (capped at €80,000) to satisfy the minimum contribution requirements under the scheme. That figure will rise to 6% of salary over the next 10 years.
Yes, employer contributions under the pension auto-enrolment scheme will be tax deductible.
For the moment we advise employers to look at your payroll system and ensure that it will be able to take instruction for enrolment and budget for pension contributions they will need to make. Employers that do not have a pension scheme already in place in their business should start to research pension providers. Consideration should also be given to reviewing employment contracts and employee handbooks for future employees.
Date published 30 Jan 2025 | Last updated 30 Jan 2025
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.Choose the right accounting firm for you
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