Questions and Answers

How much do I need to budget for auto-enrolment for 2026?

I have four employees that are due to be part of the government’s pension scheme next year. Three of them work 39 hours per week and one works 20 hours per week. They are all on minimum wage. How much will this cost me?

Published 5 Nov 2025

By Tadhg Moriarty, FCA CTA AITI 1 min read

Pension Auto-enrolment Payroll Employers

From January employers will be required to pay 1.5% of an enrolled employee’s salary into their pension scheme as part of Pension Auto-enrolment.

Let’s look at your employees and see how much this will cost you:

1. Employee working 39 hours per week on minimum wage

If you have an employee on minimum wage (€14.15 per hour from Jan 2026) working 39 hours per week their weekly gross pay will be €511.85.

You will pay 1.5% of this into the MyFutureFund scheme. This will be €7.68 per week per employee. In total this will be €23.03 per week for the three employees.

This will work out at approximately €1,200 that you will need to budget for in 2026.

2. Employee working 20 hours per week on minimum wage

If you have an employee on minimum wage working 20 hours per week their yearly pay will be €14,716. This is below the €20,000 per year minimum that an employee needs to be earning to auto-enrolled in the scheme.

However, employees earning less that €20,000 per year can choose to join the scheme i.e., they “opt in”. Employees who choose to “opt in” will be treated the same as those who are automatically enrolled, and that means the employee, employer and State will contribute the set rates.

In this case the employer contribution will be €4.25 a week for this employee (1.5% of their weekly pay of €283). For the full year the employer contribution will be €221 for this employee.

Payroll

While these calculations may seem straightforward at first glance, the reality could be quite different. The introduction of auto-enrolment has the potential to make payroll significantly more complex for businesses, with new rules, eligibility checks, and contribution requirements to manage. For many businesses, this could be a good time to explore the benefits of outsourcing payroll to ensure compliance and peace of mind.

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Contact TaxAssist Accountants for a free, no-obligation consultation to get a fixed fee quote

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Frequently Asked Questions

The pension auto-enrolment scheme will begin on 1st January 2026.

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.

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.

Published 5 Nov 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.

Tadhg Moriarty, FCA CTA AITI

Tadhg Moriarty is a highly skilled Chartered Accountant, Chartered Tax Consultant and Chartered Tax Advisor with over 15 years of experience. Tadhg has worked with private clients and family run enterprises and has a deep understanding of the unique challenges faced by these businesses. He is committed to helping his clients optimise their tax positions and improve their financial performance.

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Questions and Answers

How much do I need to budget for auto-enrolment for 2026?

1. Employee working 39 hours per week on minimum wage