Questions and Answers

Auto-enrolment: What is your First Step as an Employer?

I am an employer with 3 employees and up to now we have never had a pension scheme. Two of my senior staff have their own pensions privately and one does not. What should I do about auto-enrolment?

Updated 7 Oct 2025 | Published 25 Sep 2025

By Tadhg Moriarty, FCA CTA AITI 3 min read

Pension Auto-enrolment Employers

With employer pension contributions set to become the new standard, have you decided which scheme your business will be running from 1st January?

We recently received the below enquiry from a client, and we know lots of employers will be in a similar position:

“I am an employer with 3 employees and up to now we have never had a pension scheme. Two of my senior staff have their own pensions privately and one does not. What should I do about auto-enrolment?”

Auto-enrolment: Your First Step

Auto-enrolment, otherwise known as My Future Fund, is coming in 2026 so the first step for any employer is figuring out what they want to/are prepared to do for their employees, within the parameters of the
scheme, before they start planning. Will you simply run the state scheme or do you want to make your own private arrangements? Or both? Thinking about this and then discussing it with your team is the first step in rolling out any plan.

What will actually happen from 1st January?

Essentially, payroll providers like BrightPay or Sage will scan your payroll file, look for any employee earning above €20,000 and see if they are making a contribution to a pension scheme. If they are, they’re going to be skipped over, but if not, they’ll be auto-enrolled.

In your question you don’t say whether your two staff are making their contributions via your payroll but if we assume they are for now then they will not be auto enrolled.

So, in this case, it sounds like, at a minimum, one team member will be brought into auto-enrolment.

From 1st January 2026, you will need to contribute 1.5% of that employee’s salary – this will be the case for 3 years and after that the employer contributions will go up (to 3%, then 4.5% and then 6% at 10 years). (However, once an employee has reached the €80,000 gross pay threshold in a given year, contributions will cease thereafter.)

You can simply do this and nothing more and you will be compliant with the scheme. If you do this, nothing will change for your two employees who are making their own private pension plans. However, this point may be something that employers want to consider.

If employer contributions to a pension are about to become the workplace norm is this something your employees will start to bring up?

The kind of employees in the example above, who are making their own private arrangements, may think about the fact they are getting no employer contribution to their pension, whilst staff in the government fund (and perhaps staff earning less than them) will be. Once the understanding of the scheme beds in, employees may start to lobby employers to make some form of contribution to their pension as salary negotiations roll around.

If you wanted to work around this and negotiate with the 2 employees who have a private pension already you have a few options:

You could pay a percentage into their private PRSA via payroll so they are on a par with the new government scheme.
You can ask them to enrol into the government scheme as well as their own PRSA.
If you have more than 10 employees you could look into the idea of opening a company pension scheme.

If you do decide to contribute to their PRSAs via payroll, so that you can stay out of auto-enrolment, it is important to note that there are time considerations here. The latest information we have is that the last 13 weeks of payroll will be considered (working back from January 1st).

Consider your staff base and your business needs

As an employer, you need to consider your staff base and your business needs as the first step on the auto-enrolment journey. For example, a business with a large amount of very seasonal staff is not the same as one with a small team of long-term staff.

Once you have decided what you are willing to do for employees and what is the most practical step for you as an employer you can move on to communicating with employees/getting ready for implementation.

Frequently Asked Questions

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.

Yes, employer contributions under the pension auto-enrolment scheme will be tax deductible.

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

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.

Updated 7 Oct 2025 | Published 25 Sep 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

Auto-enrolment: What is your First Step as an Employer?

Auto-enrolment: Your First Step

What will actually happen from 1st January?

If employer contributions to a pension are about to become the workplace norm is this something your employees will start to bring up?