Pension auto-enrolment: global mobility considerations

Pension auto-enrolment (AE) is set to commence in Ireland on 1 January 2026. This is a new mandatory retirement savings scheme (named “My Future Fund”) for employees, aged between 23 to 60, who earn in excess of €20,000 per annum, where these employees are not already part of an Irish workplace pension scheme.

General overview

The amount payable by the employee is based on a fixed percentage of the employee’s annual salary. An employer must match the employee’s contributions (subject to certain limits), and the Irish Government will also contribute an additional amount. 

Both the employee and the employer will each pay 1.5% of the employee’s gross annual salary in the first year. This will increase to 6% by year 10:

Both the employer’s and the Government’s percentage contributions are capped based on a gross annual salary of €80,000 per annum. If the employee earns more than €80,000 gross per annum, the employee can still contribute but the employer and the Government won't match the employee’s contributions on any income over €80,000. This means that for the first 3 years, the maximum an employer can contribute is €1,200 per year. 

Employee contributions made under AE do not qualify for income tax relief, which differs to the relief available for employee contributions under an occupational pension scheme.

Employees can opt out of AE between month 6 and month 8. In this case, the employee’s own contributions will be refunded. Employer and government contributions remain in the fund for the employee’s benefit (i.e., these are not refunded). The opt-out window also applies after contribution rate changes, but refunds will only cover employee contributions made from the rate change. 

If the employee opts out of AE or suspends contributions, the employee is automatically re-enrolled after two years if still eligible.

Global mobility considerations

Employers with globally mobile employees will need to address a range of cross-border issues which are detailed below.

Foreign employees in Ireland

Employees of overseas companies working in Ireland and subject to Irish payroll withholding will fall within the scope of AE, even if they are members of a foreign pension scheme. 

The current definition of “exempt employment” only covers arrangements where contributions are made via payroll to an Irish-approved occupational pension scheme, qualifying Personal Retirement Savings Account (PRSA), or qualifying qualifying pan-European Pension Product (PEPP). Foreign pension arrangements are generally not included unless formal approval has been obtained from Irish Revenue. 

Revenue will consider approving foreign occupational pension schemes where the provider is established in another EU Member State or the United Kingdom. The foreign pension must meet a number of conditions in order to qualify for Revenue approval. We are available to support you with this process as needed.

For those foreign employers who cover additional Irish tax costs for inbound assignees under tax equalisation policies, AE contributions will increase assignment costs. The opt out regime should be considered for these employees where relevant.

Short-term business visitors 

Employees who spend less than six months in Ireland in a tax year may be excluded from Irish payroll withholding where a PAYE dispensation has been obtained from Revenue. 

Employers should therefore review employees in this category to ensure that PAYE dispensation applications are submitted on time to remove AE obligations.

Cross border duties

Where an Irish employee performs duties both inside and outside of Ireland, employers may obtain a PAYE Direction from Irish Revenue to limit Irish payroll withholding to the Irish-sourced portion of income. 

The foreign-sourced portion, being outside PAYE, would likely also be outside AE, though further guidance from Irish Revenue and the National Automatic Enrolment Retirement Savings Authority (NAERSA) is awaited.

Irish employees working overseas

Non-resident employees of an Irish company working abroad, for whom a PAYE Exclusion Order (PEO) has been obtained, should be outside the scope of AE for the duration of the PEO. 

Foreign taxation

If an Irish employee remains within the AE scheme while working overseas and is liable to foreign tax, the treatment of AE contributions in the host country should be considered. 

Employer and State contributions, as well as investment returns within the AE fund, may be treated as taxable income in the host location if the arrangement is not recognised as tax-exempt. Employers may need to tax-protect employees against these additional liabilities.

Actions required by employers

Employers should be mindful of the implications and any necessary actions required in advance of year end. This is particularly important as eligibility for AE will be determined based on NAERSA’s review of payroll data from Revenue over a period of 13 weeks prior the 31 December. 

Employers should ensure that all relevant processes and reviews are completed in advance to support compliance with the new regime.

This article reflects the position as of 3 October 2025. We will continue to monitor AE developments in the context of globally mobile employees and update you as further information is made available.

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