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At Carmody Kelly Co we believe that auto-enrolment is one of the most significant changes Irish employers have faced in years. Since the My Future Fund scheme went live on 1 January 2026, employers have been required to deduct pension contributions for eligible staff, add their own contributions and send the money on through payroll. With the first year almost complete, now is the ideal time to make sure your business is compliant, your costs are under control and you are ready for what comes next.

For many employers, the early months of auto-enrolment were about getting systems working. The focus now should shift to accuracy, planning and staying on the right side of your obligations as the scheme matures. Here are five checks we recommend every Irish employer completes before 2027.

1. Confirm Your Payroll Is Handling Contributions Correctly

Auto-enrolment runs through your payroll, so any errors in your system flow straight into your employees’ pension savings and your own compliance record. Revenue uses the payroll information you submit to identify eligible employees and tells you, through your payroll notifications, who should be contributing.

Check that your payroll software is correctly picking up these instructions, calculating contributions on the right pay figures and remitting them on time. Pay particular attention to employees with irregular hours, bonuses, commission or more than one job, as these are where mistakes most often appear. A quick reconciliation of deductions against remittances for the year so far can catch problems before they build up.

2. Check Which Employees Are In, Out and Coming Next

Eligibility is not fixed. Employees aged between 23 and 60 who earn more than €20,000 a year and are not already paying into a pension through payroll are automatically enrolled. That means your list of participating staff will change as people join, leave, receive pay rises or reach their 23rd birthday.

Employees outside these criteria can also choose to opt in, and those who are enrolled can opt out only during set windows after an initial period of membership. Anyone who opts out will generally be re-enrolled after two years if they still qualify. Keeping clear, up-to-date records of who is in, who has opted out and who may qualify soon will save a great deal of confusion later.

3. Budget for the Rising Cost

The current employer contribution of 1.5% of gross pay is only the starting point. Contributions are designed to increase in stages, rising to 3% in 2029, 4.5% in 2032 and 6% from 2035, with contributions calculated on earnings up to €80,000 a year. The employee pays a matching amount, and the State adds its own top-up.

For a business with a sizeable workforce, the cumulative cost over the next decade is significant, especially alongside rising wage and PRSI costs. Build auto-enrolment into your 2027 budget and your longer-term forecasts now, and factor it into your pricing where appropriate. Businesses that plan for these increases will find them far easier to absorb than those that treat each step as a surprise.

4. Review Your Existing Pension Arrangements

Employees who already contribute to a company pension scheme or PRSA through payroll are generally outside auto-enrolment. This raises an important strategic question: should your business rely on My Future Fund, or offer its own pension arrangement instead?

A company scheme or PRSA can offer greater flexibility over contribution levels, investment choices and how the benefit is presented to staff. Employee contributions to these arrangements also attract income tax relief, which can be more valuable than the State top-up for higher earners. A well-designed pension offering can also be a powerful tool for attracting and retaining good people. The right answer depends on your workforce, budget and goals, so it is worth reviewing before contribution rates begin to climb.

5. Stay on the Right Side of Your Obligations

Auto-enrolment comes with clear legal responsibilities. Employers must not encourage or pressure employees to opt out, and staff must not be treated less favourably because they are contributing. Contributions must be deducted accurately and paid over on time, and records must be kept to show that the rules have been followed.

The authority overseeing the scheme has powers to investigate non-compliance and impose penalties. Make sure managers understand what they can and cannot say to employees about the scheme, and direct questions to official information where appropriate. For owner-managed businesses, it is also worth checking how the rules apply to directors and family members on the payroll.

Getting Ready for 2027

Auto-enrolment is here to stay, and its cost will only grow over time. A short review now, covering payroll accuracy, eligibility, budgeting, your pension strategy and your compliance obligations, will put your business on a firm footing for 2027 and beyond. It is also an opportunity to consider whether your approach to pensions supports your wider goals as an employer.

At Carmody Kelly Co, we help employers manage payroll, plan for rising employment costs and make informed decisions about pension arrangements for their teams.

If you would like to discuss your business, contact us on 065 6842950 or email john@carmodykelly.ie or visit carmodykelly.ie.

Disclaimer: This article is based on publicly available information and is intended for general guidance only. While every effort has been made to ensure accuracy at the time of publication, details may change and errors may occur. This content does not constitute financial, legal or professional advice. Readers should seek appropriate professional guidance before making decisions. Neither the publisher nor the authors accept liability for any loss arising from reliance on this material.