AE 2026: The Employer's Year-End Checklist

Published: September 2025
Author: Amergin Consulting Ltd.
Target Audience: SME Owners, Finance Directors, HR Managers

Book a meeting: Schedule your free AE Readiness Check

Executive Summary

Auto-Enrolment goes live on 1 January 2026. Every Irish employer with eligible staff must identify who to enrol, calculate pension contributions through payroll, and submit data via the NAERSA portal. The problem? 79% of Irish organisations are still unprepared or only partially ready (Zellis research).

For SMEs, this isn't just another HR task—it's a compliance obligation with real financial consequences. Get it wrong and you face payroll errors, employee disputes, and potential penalties. But the window to prepare is closing fast.

This quarter is your implementation year. Use Q4 2025 to audit eligibility, validate payroll systems, budget multi-year costs, and brief your team. Done properly, January 2026 becomes just another routine payroll cycle.

What to do now (high level):

✓ Confirm who's affected: Identify staff aged 23–60 earning €20k+ without existing pensions
✓ Validate payroll: Ensure your system handles AE deductions, employer contributions, and NAERSA file formats
✓ Budget forward: Model costs through 2030 as contribution rates phase up from 1.5% to 6%
✓ Access the portal: Set up NAERSA/MyFutureFund access using your ROS credentials
✓ Communicate clearly: Prepare staff briefings explaining the new payslip deductions

Amergin viewpoint: AE is an operations project with a finance outcome. Treat 2025 as your implementation year so January 2026 is routine, not crisis.

Quick Facts: Auto-Enrolment 2026

Market Context

• Launch date confirmed: 1 January 2026—aligned with the new tax year
• Administrator: National Automatic Enrolment Retirement Savings Authority (NAERSA), with Tata Consultancy Services as managed service provider
• Preparedness gap: Only ~21% of employers fully ready; ~79% unprepared or partly prepared
• Affected employees: Approximately 800,000 Irish workers with no existing workplace pension

Contribution Economics

• Phase-in model: Employee and employer each contribute 1.5% in 2026, rising to 3% (2029), 4.5% (2032), and 6% (2035)
• State top-up: €1 for every €3 contributed by employee and employer combined
• Salary cap: Contributions calculated on earnings up to €80,000
• No state reimbursement: Employer contributions are funded directly by business

Common Triggers

• Employee crosses €20k annual earnings threshold
• New hire aged 23–60 without existing pension
• Existing employee reaches 23rd birthday
• Staff member opts back in after previous opt-out period

Who Benefits Most

• Employees without workplace pensions (finally building retirement savings)
• SMEs that prepare systems early and avoid January chaos
• Employers that position AE as a positive employee benefit

1. What's Changed (and why it matters to your business)

Launch date is fixed: 1 January 2026

After multiple delays, the Government has confirmed AE will commence on 1 January 2026, aligned with the tax year. Minister for Social Protection Dara Calleary signed the commencement order in late 2025, making this Ireland's biggest pension reform in decades.

Why this matters: No more delays. Your systems, processes, and staff communications must be ready by year-end.

Who runs AE: NAERSA and TCS

The National Automatic Enrolment Retirement Savings Authority (NAERSA) is the statutory body overseeing the scheme. Tata Consultancy Services (TCS) operates the technical infrastructure and digital platforms under a managed service contract.

Practical implications:

• You'll access the system via an employer portal using the same ROS credentials you use for Revenue
• NAERSA will process payroll files and generate auto-enrolment instructions
• Your payroll software must output data in NAERSA's required format

Preparedness gap is widening

Independent research shows 79% of Irish organisations remain unprepared. Only 21% report full readiness, despite the January deadline.

Translation for SMEs: Payroll providers, consultants, and IT vendors will be swamped in Q4 2025. Get your project started now before the queue forms.

2. AE in Plain English (SME Edition)

Who is automatically enrolled?

Mandatory enrolment applies to:

• Employees aged 23 to 60 (inclusive)
• Earning €20,000 or more per year (across one or more employments)
• Not already in a qualifying workplace pension

Voluntary opt-in available for:

• Employees aged 18–22 or 61–66
• Those below the €20k threshold who want to participate

Out of scope:

• Company directors paying Class S PRSI
• Employees already in occupational pensions or employer-contributed PRSAs
• Workers under 18 or over 66

Contribution model (the phase-in schedule)

Auto-Enrolment uses a gradual phase-in over 10 years:

Key points:

• Contributions calculated only on earnings up to €80,000
• Rates apply to gross salary before tax
• State contribution is approximately €1 for every €3 each from employee and employer

Budget implication: A €30k employee costs you €450/year in 2026, rising to €1,800/year by 2035.

Opt-out and re-enrolment rules

Opt-out window: Employees can only opt out during a two-month window starting six months after enrolment (months 7–8).

Refund rules: If an employee opts out, they receive a refund of their own contributions. Employer and State contributions remain in the fund.

Re-enrolment cycle: Employees who opt out are automatically re-enrolled after two years if still eligible. This cycle repeats indefinitely.

Compliance risk: Employers cannot encourage, pressure, or incentivise employees to opt out. This is illegal and enforceable by the Workplace Relations Commission.

The system you'll use: NAERSA portal

How it works:

• Single retirement pot follows the employee between jobs ("pot-follows-member" model)
• Employer portal accessed via your existing ROS credentials
• Payroll file exchange on a regular schedule—NAERSA sends auto-enrolment instructions, you return contribution data
• Limited admin burden compared to traditional pension schemes (no individual policy setup)

Portal access: Available to employers and authorised payroll/tax agents using MyGovID authentication.

3. Your Q4 2025 Action Plan (8-Week Implementation Checklist)

Use this as your internal project plan. Assign owners, set deadlines, and track completion.

☐ Week 1–2: People & Eligibility Audit

What to do:

• Export payroll data showing: employee name, DOB, annualised pay, current pension status
• Identify who will be automatically enrolled (23–60, €20k+, no pension)
• Flag who can opt in voluntarily (18–22 or 61–66)
• Document who is out of scope (directors, existing pension members)

Why it matters: This determines the scale of your AE obligation and drives your budget calculations.

Common mistakes:

• Assuming part-time staff under €20k are exempt (they might cross the threshold mid-year)
• Forgetting about staff who turn 23 or reach €20k during 2026
• Not checking if existing "pensions" actually qualify under AE rules

Deliverable: Spreadsheet showing AE status for every employee, ready for payroll setup.

☐ Week 2–3: Payroll Readiness Assessment

What to validate:

• Contribution calculation: Can your system deduct 1.5% from gross pay and calculate employer match?
• Salary cap: Does it apply the €80k earnings ceiling correctly?
• AE file exchange: Can it generate and consume NAERSA file formats (including Auto-Enrolment Payroll Numbers)?
• Opt-out handling: Can it suspend deductions during opt-out windows and restart for re-enrolment?

Edge cases to test:

• Employees starting/leaving mid-pay period
• Staff on unpaid leave or career breaks
• Workers with multiple employments (NAERSA uses data matching to allocate earnings)
• Irregular hours and variable pay calculations

Vendor questions to ask:

1. Has your software been certified for NAERSA integration?
2. What's your support SLA for AE queries in January 2026?
3. If gaps exist, what's your contingency plan?

Deliverable: Written confirmation from payroll provider that your system is AE-ready, plus documented test results.

☐ Week 3–4: Finance & Cost Modelling

What to calculate:

Build a multi-year cost projection showing employer contributions from 2026 through 2035.

Worked examples (employer cost only):

10-person professional practice (avg €38k salary)

• 2026: 10 employees × €38,000 × 1.5% = €5,700/year (€475/month)
• 2029: 10 employees × €38,000 × 3% = €11,400/year
• 2035: 10 employees × €38,000 × 6% = €22,800/year

25-person retailer (mixed part-time/full-time)

• Eligible staff: 18 employees over €20k threshold
• Average pay: €27,000
• 2026: 18 × €27,000 × 1.5% = €7,290/year (€608/month)
• 2035: 18 × €27,000 × 6% = €29,160/year

50-person construction firm (variable hours)

• Eligible staff: 35 employees (seasonal fluctuation)
• Average eligible pay: €34,000
• 2026: 35 × €34,000 × 1.5% = €17,850/year (€1,488/month)
• 2035: 35 × €34,000 × 6% = €71,400/year

Budget tips:

• Factor in expected headcount growth and pay rises
• Model scenarios for increased overtime (pushes people over €20k threshold)
• Remember contributions are tax-deductible against Corporation Tax
• Set aside reserves now for the 2029 and 2032 step-ups

Deliverable: Board-approved AE cost forecast integrated into 2026–2030 financial plans.

☐ Week 4–5: Portal Access & Governance

Setup steps:

1. Register on NAERSA portal using your ROS credentials (MyGovID authentication)
2. Assign access roles: Determine who can view data, make changes, and submit files
3. Document approval process: Who signs off on contribution submissions?
4. Set up agent access if using an external payroll provider

Data governance checklist:

• ☐ GDPR-compliant storage for AE records (retain 4+ years)
• ☐ Clear escalation process if NAERSA flags discrepancies
• ☐ Backup contact if primary portal user is unavailable
• ☐ Calendar reminders for re-enrolment cycles (every 2 years)

Deliverable: Portal access confirmed, internal SOP documented, roles assigned.

☐ Week 5–6: Staff Communications

What to prepare:

1. "What's Changing" announcement letter

• Sent: Early December 2025
• Content: AE launch date, who's affected, contribution amounts, opt-out rules
• Tone: Positive (frame as a benefit with free employer and State money)

Sample language:
"Starting 1 January 2026, Ireland's new Auto-Enrolment pension scheme launches. This means eligible employees will automatically build retirement savings, with contributions from you, the company, and the State. Here's what changes on your payslip..."

2. Payslip explainer FAQ

• How much will be deducted?
• Can I opt out, and when?
• What happens to my pension if I change jobs?
• Where can I find more information?

3. Manager briefing script

Prepare your line managers to handle 1:1 questions in January:

• "Why is my net pay lower?"
• "I don't want a pension—can I opt out now?" (Answer: No, only after 6 months)
• "Does this replace my existing company pension?" (Answer: No, AE only applies to those without one)

Deliverable: Communication pack ready for distribution in December 2025.

☐ Week 6–7: Vendor Alignment & Contingency Planning

Get written confirmation from your payroll provider on:

• AE readiness date and certified integration status
• Support availability in January 2026 (extended hours? dedicated helpline?)
• File submission process and backup procedures if primary system fails

Contingency options if gaps remain:

• Temporary outsourcing to AE-ready payroll bureau
• Manual calculation process (documented and tested)
• Delayed enrolment for specific cohorts (only if legally compliant)

Deliverable: Service Level Agreement (SLA) with payroll provider covering AE support.

☐ Week 8: December Dry Run

Final pre-launch test:

• Run a sandbox payroll cycle for January 2026 with AE deductions enabled
• Generate sample payslips showing employee and employer contributions
• Test file export to NAERSA (even if in test environment)
• Review edge cases: starters, leavers, unpaid leave

Success criteria:

• ✓ Contributions calculate correctly for all eligible staff
• ✓ Payslips display deductions clearly
• ✓ NAERSA file formats validate without errors
• ✓ Opt-out windows documented and ready to trigger in July 2026

Deliverable: Sign-off from Finance Director and Payroll Lead that systems are go-live ready.

4. Sector-Specific Watch-Outs (What Trips SMEs Up)

Construction: Seasonal workers and variable hours

Challenge: Eligibility toggles as workers move between projects and hours fluctuate week-to-week.

Solution:

• Ensure payroll captures accurate weekly earnings so NAERSA's auto-enrolment tests reflect reality
• Monitor workers who cross €20k threshold mid-year
• Document multiple employments (if a worker does jobs with multiple entities, earnings may aggregate)

Risk: Incorrectly enrolling someone not yet eligible, or missing someone who became eligible.

Retail & Hospitality: Part-time staff and tips

Challenge: High proportion of part-time employees, many hovering near the €20k threshold. Tips may or may not count toward earnings.

Solution:

• Clarify what constitutes "earnings" for AE purposes (basic pay + fixed allowances; tips generally excluded unless paid through payroll)
• Track part-timers who increase hours seasonally (Christmas, summer)
• Prepare managers for opt-out conversations post-month 6 (don't pressure staff either way)

Risk: Morale issues if staff feel uninformed or pressured about the €20k threshold.

Professional Services: Frequent starters and leavers

Challenge: Mid-month joiners/leavers complicate pro-rata calculations and portal updates.

Solution:

• Run AE eligibility checks in every payroll cycle
• Update NAERSA portal promptly when staff join/leave to avoid arrears or over-contributions
• Ensure contracts clarify AE obligations for employees starting mid-year

Risk: Late enrolments trigger back-dated contribution requirements.

5. Alternative Pathways: When a Private Pension Makes More Sense

Some SMEs may legitimately avoid AE by maintaining or establishing a qualifying pension scheme. But this requires careful analysis—don't make assumptions.

Option 1: Qualifying existing occupational pension

How it works: If your current plan meets AE contribution minima and covers all eligible staff, those employees are exempt from auto-enrolment.

Requirements:

• Employer contributions meet or exceed AE rates (1.5% minimum in 2026)
• Scheme covers all staff aged 23–60 earning €20k+
• Documentation proving qualifying status (keep updated)

Benefit: You control contribution levels and can potentially cap at 3% instead of scaling to 6%.

Risk: If scheme design falls below AE standards, WRC can require retrospective enrolment.

Option 2: Setting up a PRSA to sidestep AE

Strategy: Introduce a company PRSA with 3% employer contributions in 2025 (before AE launches). This may exempt you from future step-ups to 4.5% and 6%.

Advantages:

• Cost control: Hold contributions at 3% rather than 6%
• Flexibility: Choose provider, investment options, and terms
• Employee goodwill: Position as proactive benefit

Disadvantages:

• Setup cost and admin: Requires contract negotiation with PRSA provider
• Compliance risk: Scheme must truly be "more favourable" than AE—no waiting periods, no exclusions that make it inferior
• Ongoing obligations: Must keep scheme active and compliant

When it makes sense: SMEs with stable workforces, good margins, and desire for predictable pension costs.

When it doesn't: Micro-businesses where setup costs outweigh long-term savings, or high-turnover firms where admin burden exceeds benefits.

Critical: Take qualified advice. The Department of Social Protection will issue guidance on "qualifying scheme" criteria by 2027—early adopters may face retrospective adjustments if rules change.

6. The Real Cost Question: SME Examples You Can Lift and Use

Below are worked examples showing employer costs only across different business profiles. Use your actual payroll to refine.

Micro-business: 5-person consultancy

Monthly cash flow impact: €191 (2026) → €765 (2035)

Small business: 25-person retailer

Profile: 15 full-time staff (€32k avg), 10 part-time staff (5 over €20k threshold)

Monthly cash flow impact: €750 (2026) → €3,000 (2035)

Seasonal consideration: If part-timers increase hours at Christmas and cross €20k, expect additional mid-year enrollments.

Medium business: 50-person construction firm

Profile: 40 site workers (variable hours), 10 office staff

Monthly cash flow impact: €1,713 (2026) → €6,850 (2035)

Planning tip: Model the 2035 "steady state" cost now so pricing, wage negotiations, and budgets account for the phase-in. Don't let contribution step-ups collide with other cost pressures.

7. Implementation Timeline: Your Week-by-Week Plan

Use this as your internal project schedule:

8. Why This Is Urgent (Even If You Feel "Nearly There")

Survey evidence:

• 79% of Irish employers are not fully prepared (Zellis)
• 77% have not calculated cost exposure (European Pensions)
• 58% have not tested payroll systems
• 33% have not updated employment contracts

Translation: Most of your competitors are behind. But that doesn't reduce your compliance obligation.

Consequences of late preparation:

• Payroll errors in January 2026 (under-deducting or over-deducting contributions)
• Employee trust issues (confusion about new deductions, poor communication)
• NAERSA compliance breaches (late file submissions, missing data)
• WRC disputes (employees claiming improper deductions or denial of opt-out rights)

A disciplined Q4 project now is cheaper than emergency remediation in mid-2026.

9. Governance & Who's In Charge (So Nothing Slips)

Clear accountability prevents tasks falling through cracks. Assign these roles explicitly:

Owner/Managing Director

• Ultimate sponsor: Approves cost model, policy decisions, and budget
• Signs off on go-live readiness

Finance Director / CFO

• Owns cost forecasting and cash flow implications
• Monitors monthly contribution payments and variance analysis

Payroll Lead (or external provider)

• Controls technical execution: File submissions, rate calculations, deduction accuracy
• First point of contact for NAERSA portal issues

HR Manager / Operations Lead

• Owns employee communications: Briefings, FAQs, opt-out process
• Handles re-enrolment cycles and policy updates

External Support

• NAERSA/TCS: Operates the portal and technical infrastructure
• Amergin Consulting (optional): End-to-end AE readiness, payroll configuration, and ongoing compliance support

Pro tip: Schedule a monthly AE steering meeting from October 2025 through March 2026 to track progress and resolve issues quickly.

10. Common Pitfalls (And How to Avoid Them)

Pitfall 1: Assuming part-time staff are exempt

Reality: Eligibility is based on total annual earnings, not hours worked. A part-timer earning €22k is fully covered.

Fix: Audit all staff, not just full-timers.

Pitfall 2: Not testing payroll systems

Reality: 58% of employers haven't validated their systems can handle AE calculations and file exchanges.

Fix: Run a December dry-run payroll before go-live.

Pitfall 3: Poor employee communication

Reality: Staff see a new payslip deduction without explanation and assume it's a mistake or pay cut.

Fix: Send clear announcements in December, provide FAQs, and brief managers.

Pitfall 4: Forgetting the multi-year cost impact

Reality: Budgeting for 1.5% in 2026 without planning for 6% by 2035 creates nasty surprises.

Fix: Model the full phase-in schedule and integrate into long-term financial plans.

Pitfall 5: Encouraging opt-outs

Reality: It's illegal to pressure employees to opt out. WRC can order compensation.

Fix: Present opt-out as a neutral employee choice; never incentivise or suggest it.

11. FAQs (Tight and Practical)

Do I need a pension broker?

No. AE is administered centrally by NAERSA. Employers interact via the portal (or through their payroll agent). No broker commissions or individual policy setup required.

How do I log in to the NAERSA portal?

Use the same ROS credentials you (or your tax agent) use to access Revenue Online Services. Authentication is via MyGovID.

What if we already have a company pension?

Members of a qualifying scheme are not auto-enrolled. But you must evidence that the scheme meets AE standards. Check with your pension provider or adviser.

Can employees opt out immediately?

No. Opt-out is only permitted during a two-month window starting six months after enrolment (months 7–8). Employees cannot opt out on day one.

What happens if an employee changes jobs?

Their pension pot follows them. The "pot-follows-member" model means the retirement account stays with the individual, transferring automatically to the new employer's AE contributions.

Are employer contributions tax-deductible?

Yes. Pension contributions are allowable expenses for Corporation Tax, just like salaries and other payroll costs.

What if my payroll provider isn't ready?

You have three options:

1. Switch to an AE-ready provider before year-end
2. Use a temporary payroll bureau for January 2026
3. Implement a manual workaround (high risk—not recommended)

Best practice: Confirm provider readiness in writing now.

12. The Amergin Advantage: Compliance Without Complexity

Amergin Consulting helps Irish SMEs navigate Auto-Enrolment with confidence. Our integrated approach combines payroll expertise, financial modelling, and regulatory compliance support.

What we provide:

✓ AE Readiness Assessment
60-minute diagnostic covering eligibility, payroll capability, cost impact, and compliance gaps.

✓ Payroll Configuration & Testing
Ensure your system calculates contributions correctly, handles opt-outs, and exchanges files with NAERSA.

✓ Multi-Year Cost Modelling
Detailed projections showing cash flow impact through 2035, with scenario analysis for growth and wage inflation.

✓ Employee Communication Packs
Templated letters, FAQs, and manager briefing scripts aligned to your business.

✓ Ongoing Compliance Support
Portal management, re-enrolment tracking, and regulatory updates as AE rules evolve.

Why SMEs choose Amergin:

Proven SME expertise: Over 500 Irish businesses supported across retail, construction, professional services, and hospitality.

Practical, not theoretical: We focus on what works in real payroll environments, not generic compliance checklists.

Fixed-fee transparency: No surprises—clear pricing for AE readiness projects.

Integrated advisory: AE sits alongside our payroll, financial advisory, and statutory compliance services.

Conclusion: Make 2025 Your Implementation Year

Auto-Enrolment is not optional, and the deadline is not flexible. 1 January 2026 will arrive whether you're ready or not.

The difference between a smooth rollout and a crisis? Action taken in Q4 2025.

SMEs that complete this checklist will enter 2026 with:

• Payroll systems tested and validated
• Staff informed and reassured
• Costs budgeted and approved
• Portal access configured
• Compliance risks mitigated

Those that delay will face payroll errors, employee disputes, supplier queues, and last-minute costs.

The choice is simple: prepare now or scramble later.

Ready to Check Your AE Readiness?

Book your complimentary 60-minute AE Readiness Assessment with Amergin Consulting.

We'll audit your eligibility data, test payroll capability, model cost impact, and hand you a practical action plan—aligned to Amergin's proven AE implementation framework.

No obligation. No jargon. Just clear answers to help you enter 2026 with confidence.

Schedule your free AE Readiness Check → Book now

About Amergin Consulting Ltd.

Amergin Consulting Ltd. is a Dublin-based consultancy specialising in SME financial advisory, payroll, and compliance services. 

Our integrated approach helps SMEs navigate complex legislative changes—from GDPR and the Work-Life Balance Act 2023 to Statutory Sick Pay and Auto-Enrolment 2026—with practical, cost-effective solutions designed for businesses without dedicated HR or compliance teams.

Disclaimer

This publication provides general information and does not constitute financial, legal, or pension advice. While every effort has been made to ensure accuracy, Auto-Enrolment regulations continue to evolve. SME owners should consult qualified professional advisors for guidance on specific situations. Compliance with applicable regulations remains each business owner's responsibility.

Sources:

Gov.ie: AE overview, eligibility criteria, 1 January 2026 launch confirmation, employer portal via ROS
Citizens Information: Scheme start date, opt-out timing, contribution rates, and phase-in schedule
Zellis Research: 79% employer unpreparedness statistic
NAERSA/TCS: Department of Social Protection confirmation of TCS as managed service provider; Oireachtas written answers on administration structure
Irish Association of Pension Funds (IAPF): Technical guidance on file flows and Auto-Enrolment Payroll Numbers (AEPN)
Irish Statute Book: Automatic Enrolment Retirement Savings System Act 2024