Auto-Enrolment Is Coming in 2026: Here’s What Contractors Need to Know

From 1 January 2026, a brand-new retirement savings system — Auto-Enrolment — will launch in Ireland. It’s one of the biggest changes to pension planning in years, and naturally, contractors have plenty of questions about how (or if) it applies to them.

To help you prepare, we’ve pulled together the key points for Auto-Enrolment— breaking down what’s changing, who’s affected, and what steps you may need to take before the new system goes live.

Why Auto-Enrolment Is Being Introduced?

Right now, one in three workers in Ireland doesn’t have a private pension, and many rely solely on the State Pension in retirement. Auto-Enrolment has been designed to close that gap and give more people a stronger financial foundation later in life.

How the Auto-Enrolment System Will Work?

If you meet the criteria, you won’t have to apply — NAERSA will enrol you automatically using Revenue payroll data. Your retirement pot will grow through combined contributions from you, your employer and the government.

In an umbrella company environment, the contractor (net pay deduction), the umbrella company (gross pay business expense), and the government all contribute. Rates start low and gradually increase over the first 10 years.

What are my Investment options?

Your contributions are invested to grow over time. You’ll have a default investment strategy, or you can switch to low-risk, medium-risk, or high-risk options on the MyFutureFund portal.

What if I changes roles?

If you change employers or contracts, your My Future Fund stays intact — so there's no need to move or restart anything when moving roles.

When can I access the funds?

Currently aligned with the State Pension age (66), with a lump-sum payment when you retire.

Who Will Be Auto-Enrolled?

You’ll be automatically enrolled if all of the following apply:

You’re aged 23 to 60
You earn more than €20,000 per year
You’re not already contributing to a pension through payroll

Who isn’t included?

You won’t be automatically enrolled if:

You are under 23 or over 60 (though you can opt in)
Your income is below €20,000
You already contribute to a payroll pension (e.g., PRSA, occupational scheme)
You pay Class S PRSI (e.g., director umbrella or personal limited company contractors)
You’re self-employed

What This Means for Contractors?

Contractors may fall into two different groups:

PAYE Umbrella Contractors

If you’re operating under an umbrella company and pay Class A PRSI, you may be included once you meet the age and income requirements.

Director Umbrella or PLC Contractors

If you’re paying Class S PRSI, Auto-Enrolment will not apply. You’ll continue managing your pension arrangements independently.

If You Have Multiple Roles, Here’s How Eligibility Works

NAERSA will look at your combined income across all employments (up to a 13-week look-back period). If your total earnings exceed €20,000 and you have at least one Class A PRSI role, you’ll be enrolled for that role only.

Contribution Rates Over Time

Auto-Enrolment uses a phased approach.

Years	Employee	Employer	State
1–3	1.5%	1.5%	0.5%
4–6	3%	3%	1%
7–9	4.5%	4.5%	1.5%
10+	6%	6%	2%

A key point: If you join later (e.g., you become eligible in 2029), you start at the current rate, not the original starting rate.

Can You Opt Out or Pause Your Contributions?

Yes — but there are timelines and conditions you’ll need to be aware of.

Opting out

You can opt out in months 7–8 after enrolment or after a rate increase
Your personal contributions are refunded
Employer and State amounts stay in your retirement pot
You will be automatically re-enrolled every two years if still eligible

Suspending contributions

Allowed after the initial six months
Can pause for 1–2 years
No refunds
Re-enrolment still applies after two years

What If You Want to Contribute to a Private Pension Instead?

You can — but with one important distinction:

If the pension is run through payroll, Auto-Enrolment contributions stop
If it’s a pension set up and not processed through payroll, the system will not detect it and contributions to Auto-Enrolment will continue

This is especially relevant for contractors managing long-term financial planning.

Can You Access Your Savings Early?

Generally, no. Funds are locked until retirement age, unless you meet specific exceptional criteria (e.g., serious ill health). NAERSA will confirm full details once the system launches.

What Should Contractors Do Now?

A few helpful steps:

Check your PRSI class — it determines whether Auto-Enrolment applies.
Understand how contributions affect your take-home pay as rates increase.
Reach out to Icon Accounting if you’re unsure which category you fall into or how to plan effectively.

As always, Icon Accounting is here to support you through the changes, help you understand how the new process works, and ensure you’re making informed decisions about your financial future. If you do need support when it comes to understanding Auto-enrolment and it’s impact on your contract income, reach out to our team today!