By Richie Lennon
Ireland’s auto-enrolment pension scheme, MyFutureFund, started on 1 January 2026. Eligible employees are enrolled by NAERSA, and their employers must contribute through payroll. During 2026 to 2028, the employee and employer each contribute 1.5% of gross pay, with another 0.5% from the State. Contributions apply up to an annual earnings cap of €80,000. For an owner, the immediate job is to check payroll, explain deductions to staff and include the employer cost in the cash plan.
When we talk about auto-enrolment, owners tend to have three questions: what do I need to tell staff, what will it cost, and what do I need to do? Start there. A pension policy nobody can explain is not much use when the first question arrives about a payslip.
MyFutureFund is now operating. This is no longer a question of preparing for a possible launch, and there is no exemption simply because you run a small business.
Who is eligible for auto-enrolment?
NAERSA, the National Automatic Enrolment Retirement Savings Authority, identifies eligible employees using Revenue payroll data. Its participant handbook sets out three main conditions: age 23 to 59, earnings of at least €20,000 a year across employments, and employment without qualifying pension coverage through payroll. The earnings assessment uses a lookback of up to 13 weeks. Someone earning €5,000 over 13 consecutive weeks meets the annualised earnings test.
An employee with two jobs can have one exempt employment and another covered by MyFutureFund. A pension in one job does not automatically exclude the other. Employees outside the automatic age or earnings criteria may be able to opt in if they are over 18 and under 66 and have an eligible employment.
Use the MyFutureFund participant handbook for the detailed eligibility rules. Follow the enrolment notifications issued through the scheme rather than deciding locally that a person should be excluded.
What if staff already have a pension?
An existing pension needs to qualify for the employment to be exempt. From 1 January 2026, defined contribution occupational schemes and PRSAs must meet minimum contribution standards: 3.5% of gross remuneration in total, including at least 1.5% from the employer, with remuneration capped at €80,000 for this test. Defined benefit schemes have a different standard.
The important question is therefore not simply whether someone has a PRSA. It is whether the arrangement qualifies, the contributions meet the standards and the payroll record reflects it. Check this with the pension provider and payroll operator. The scheme’s employer FAQs explain the exemption requirements.
Are company directors included?
That depends on their PRSI status. A director paying PRSI as an employee can be enrolled if the other conditions are met. A director treated as self-employed is not eligible. Being on a company payroll does not, on its own, settle the question.
Auto Enrolment Pension Contributions
The contribution rates increase in stages. These are scheme years, not years counted from when a particular employee joins.
| Scheme period | Employee | Employer | State | Total |
|---|---|---|---|---|
| 2026 to 2028 | 1.5% | 1.5% | 0.5% | 3.5% |
| 2029 to 2031 | 3% | 3% | 1% | 7% |
| 2032 to 2034 | 4.5% | 4.5% | 1.5% | 10.5% |
| From 2035 | 6% | 6% | 2% | 14% |
Contributions are calculated on gross pay, up to the €80,000 annual cap. The employee’s contribution comes out of net pay after income taxes. MyFutureFund provides a State top-up rather than the usual employee pension Income Tax relief. The contribution rate is fixed: employees and employers cannot choose to pay more or less into this scheme. See how MyFutureFund works.
What does this cost your business?
Take an eligible employee earning €40,000 for a full year in 2026:
| Contributor | Annual contribution | Monthly average |
|---|---|---|
| Employee | €600 | €50 |
| Employer | €600 | €50 |
| State | €200 | €16.67 |
| Total pension contributions | €1,400 | €116.67 |
The monthly figures are rounded averages, not payroll instructions. Ten employees on the same salary would add €6,000 a year to employer pension contributions at the initial rate. At the scheduled 3% employer rate, the equivalent full-year cost would be €12,000, assuming the same salaries and participation.
That cost belongs in your staffing budget alongside wages and employer PRSI. If you are deciding whether to hire, price the whole employment cost. An affordable salary and an affordable hire are different calculations.
What employers need to do
The payroll job and the cash-planning job should have named owners.
1. Confirm employer registration and the payment method with MyFutureFund. 2. Check that payroll can retrieve and apply the scheme’s enrolment notifications. 3. Inform employees when they are enrolled and explain the deduction on their payslip. 4. Make the required payroll submission each time payroll runs, and pay contributions on or before the employee’s pay date. 5. Reconcile payroll deductions, employer contributions and payments to the scheme.
If you use a payroll provider, agree who handles each step. Do not assume that buying compatible software also assigns responsibility for registration, staff communication and payment reconciliation.
For a wider staffing review, our guide to remuneration packages explains how to compare salary, pensions and benefits as one employer cost.
Can employees opt out?
Employees initially stay in the scheme for six months. The opt-out window is months seven and eight after initial enrolment, with another window following a contribution rate change. There are also separate suspension rules.
After an initial opt-out, the employee’s own contributions are refunded while employer and State contributions remain invested. Eligible employees who have not rejoined are automatically re-enrolled after two years. An employer cannot require or pressure an employee to opt out. The participant FAQs explain the current windows and procedures.
What are the rules for pensions in Ireland?
MyFutureFund is one part of pension planning. It does not replace every other pension arrangement or the State Pension.
An occupational pension is arranged through an employer. A PRSA is a personal retirement savings account that can also receive employer contributions. Retirement annuity contracts are another form of personal pension. Their eligibility, tax treatment, charges and benefits differ. If you are comparing arrangements, take regulated pension advice before choosing a product.
Our view on the business side is straightforward: decide what the company can fund after allowing for wages, tax, working capital and a sensible cash buffer. A tax advantage does not make an unaffordable contribution affordable. The accounting and cash-planning work should happen early enough for the pension adviser to act on it.
How do I qualify for the state pension in Ireland?
The State Pension (Contributory) is based on your social insurance record. PRSI means Pay Related Social Insurance. It is separate from the money invested in MyFutureFund or a private pension.
State Pension age is currently 66. People born on or after 1 January 1958 can choose to draw their entitlement between ages 66 and 70. Qualification and the payment rate depend on the contribution record and applicable calculation rules; pension membership alone does not establish entitlement. Check your record and the Department of Social Protection’s State Pension guidance.
Voluntary contributions PRSI
If you stop paying compulsory PRSI, voluntary contributions may help protect certain future pension entitlements. Admission conditions and deadlines apply. They do not provide the same cover as compulsory PRSI for every social welfare benefit. Check the Department’s voluntary PRSI guidance before treating a payment as a way to fill a gap.
Put the pension cost into your numbers
You should be able to see what employer pension contributions cost now, what the scheduled increases mean and how a new hire changes the forecast. That is part of running the finances, alongside getting payroll right.
Our outsourced accounting services bring payroll and business accounting into an agreed scope. If your Irish business turns over €250,000 or more and you need clearer control of staffing costs and cash, book a Finance Fit Call.
FAQs
MyFutureFund automatically enrols eligible employees into a retirement savings scheme. The employee, employer and State contribute to the employee’s fund. It is separate from PRSI and the State Pension.
MyFutureFund started on 1 January 2026. It is operating now; the contribution increases shown above are future stages of the existing scheme.
The initial opt-out window is months seven and eight after enrolment. Initial opt-out refunds your own contributions; employer and State contributions stay invested. Eligible employees are automatically re-enrolled after two years. There are separate suspension rules and a further opt-out window after a contribution rate change.
You keep one MyFutureFund savings fund as you move between jobs. Contributions from a new employment depend on whether that employment is covered by the scheme. See the scheme’s contribution guidance.
Employment with qualifying pension coverage through payroll is exempt. For defined contribution schemes and PRSAs, minimum contribution standards apply from 2026. A pension in one job does not automatically exempt a second job. Age, earnings and employment status also determine whether someone is enrolled automatically or can opt in.
Employer MyFutureFund contributions are deductible for Corporation Tax in the year they are paid. An unpaid provision does not qualify. Revenue explains this in its auto-enrolment pensions manual.
Yes, if they have eligible employees or employees who can opt in. Employer size does not provide a general exemption.
At the 1.5% rate applying in 2026 to 2028, the annual employer contribution reaches €1,200 at the €80,000 earnings cap. Other pension arrangements have different limits and tax rules.
No. MyFutureFund builds invested retirement savings. PRSI is social insurance and contributes towards entitlement to the State Pension and other benefits under its rules.
The accounting work covers payroll, employer cost and business cash planning within the agreed service scope. Product selection and personal pension recommendations require a suitably regulated pension adviser.
