Payroll compliance in Ireland: your 2026 checklist for small businesses
Stay compliant with payroll regulations in Ireland. Learn about auto-enrolment, minimum wage rules, sick pay and Revenue reporting obligations.
Key takeways
- The national minimum wage is €14.15 per hour for employees aged 20 and over from 1 January 2026.
- Pension auto-enrolment (My Future Fund) is now live, with employers matching employee contributions at 1.5% in year one, rising over time.
- Statutory sick pay stays at five days per year in 2026—planned increases have been paused.
- Real-time reporting to Revenue through ROS is mandatory for every pay run, and late or inaccurate filings can trigger penalties.
Payroll compliance is a key responsibility for every employer.
Getting it right means paying employees correctly, reporting payroll information to Revenue on time, and meeting your legal obligations as an employer.
In 2026, businesses need to account for three important developments: pension auto-enrolment, higher minimum wage rates and ongoing statutory sick pay requirements.
This checklist walks you through what changed and the exact steps to run compliant payroll, so you can avoid penalties and protect your cash flow.
Here’s what we’ll cover:
- What are the big payroll changes for 2026?
- How do you run compliant payroll, step by step?
- What payroll mistakes should you avoid?
- How can you make payroll compliance easier?
- Final thoughts
- Payroll compliance checklist for Irish small businesses
- Frequently asked questions on payroll compliance for Irish small businesses
What are the big payroll changes for 2026?
The main payroll changes employers need to consider in 2026 are:
- pension auto-enrolment,
- updated minimum wage rates,
- and statutory sick pay requirements.
These changes affect payroll calculations, employee deductions and reporting obligations
Pension auto-enrolment (My Future Fund)
My Future Fund, Ireland’s automatic enrolment pension scheme, started on 1 January 2026.
Eligible employees aged between 23 and 60 who earn €20,000 or more per year and are not already paying into a pension through payroll must be automatically enrolled in My Future Fund.
Contributions are shared. In the first three years, you contribute 1.5% of an employee’s gross pay, the employee contributes 1.5%, and the State adds €1 for every €3 the employee saves.
These rates rise every three years until they reach 6% from you and 6% from the employee by 2035.
Contributions apply to earnings up to €80,000 a year.
The scheme is administered by the National Automatic Enrolment Retirement Savings Authority (NAERSA), with payroll software expected to support employer reporting and contribution requirements.
National minimum wage
The national minimum wage rose to €14.15 per hour for employees aged 20 and over on 1 January 2026, up from €13.50.
Lower rates apply to younger workers: €12.74 for those aged 19, €11.32 for those aged 18, and €9.91 for under-18s.
Check that every employee’s hourly rate meets the floor for their age, including part-time, casual, and seasonal staff.
Statutory sick pay
Statutory sick pay (SSP) gives eligible employees paid time off when a doctor certifies them unfit for work.
The entitlement increased to five days in 2024, and it stays at five days in 2026—the planned rise to ten days was paused after a government review of the impact on smaller employers.
SSP is paid at 70% of an employee’s normal daily earnings, capped at €110 a day, and applies once someone has 13 weeks of continuous service.
You can read more in Sage Advice guidance on statutory sick pay.
How do you run compliant payroll, step by step?
Follow these five steps for every employee and every pay run.
Step 1: Set up employee details correctly
Collect and verify each employee’s full name, address, date of birth, and Personal Public Service Number (PPSN) before their first pay run.
Confirm each PPSN against official documentation before processing payroll.
Incorrect employee details can lead to tax calculation and reporting issues.
Step 2: Register as an employer with Revenue
If you are taking on staff for the first time, register as an employer for PAYE through Revenue’s Online Service (ROS).
You need this registration before you can report pay, deduct Income Tax, Pay Related Social Insurance (PRSI), and Universal Social Charge (USC), or request employees’ Revenue Payroll Notifications (RPNs).
Step 3: Run payroll and report to Revenue through ROS
Ireland operates real-time reporting, so you must submit payroll details to Revenue on or before the date you pay each employee.
Retrieve the latest RPN for every employee first to apply the correct tax credits and cut-off points, then file your payroll submission through ROS.
Late or inaccurate payroll submissions can result in compliance issues and potential penalties.
Step 4: Issue accurate payslips
Give every employee a payslip showing gross pay, all deductions, and net pay.
From 2026, payslips should also reflect any auto-enrolment contributions.
Clear payslips reduce queries and give you a defensible record if a deduction is ever challenged.
Step 5: Keep payroll records for audits
Retain payroll records for at least six years in case of a Revenue audit or a Workplace Relations Commission (WRC) inspection.
Maintain records of pay rates, hours worked, Revenue Payroll Notifications (RPNs), payroll submissions and sick leave so they are available if Revenue or the Workplace Relations Commission requests them.
What payroll mistakes should you avoid?
Some payroll mistakes can increase the risk of compliance issues, additional costs and potential penalties:
- Misclassifying workers. Treating someone who is really an employee as a contractor can leave you liable for unpaid PRSI and tax.
- Forgetting to update pay rates. Review payroll settings regularly to make sure minimum wage rates are updated. Using outdated rates could result in employees being paid less than their legal entitlement.
- Missing the auto-enrolment duty. Failing to enrol eligible staff, or deduct the right contributions, can lead to enforcement action by NAERSA.
- Filing late. Because reporting is real-time, even a few days’ delay on each pay run adds up and can attract interest and penalties.
How can you make payroll compliance easier?
Using payroll software can help simplify payroll administration and reduce the risk of manual errors.
Payroll software can help employers manage statutory rates, payroll reporting and workplace pension obligations more efficiently while reducing admin workload.
To pull all of this together, download the “SME Compliance Checklist 2026” and work through it before your next pay run.
Final thoughts
Payroll compliance requires regular attention throughout the year.
Reviewing employee details, pay rates, pension obligations and reporting processes can help reduce the risk of errors.
Payroll compliance checklist for Irish small businesses
Before your next payroll run, check that you have:
- Registered as an employer with Revenue
- Collected and verified employee PPSNs
- Retrieved the latest Revenue Payroll Notifications (RPNs)
- Checked employees are paid at least the applicable minimum wage rate
- Applied statutory sick pay correctly
- Assessed which employees qualify for My Future Fund auto-enrolment
- Submitted payroll information to Revenue on or before payday
- Issued accurate payslips
- Retained payroll records for at least six years
Frequently asked questions on payroll compliance for Irish small businesses
Any employee aged 23 to 60 who earns €20,000 or more a year and is not already contributing to a pension through payroll must be enrolled automatically from 1 January 2026.
It is €14.15 per hour for employees aged 20 and over, with reduced rates for those under 20.
Five paid sick days per calendar year, paid at 70% of normal daily earnings up to €110 a day, for employees with at least 13 weeks of service.
On or before every payday.
Ireland’s real-time reporting rules mean each payroll submission must reach Revenue through ROS by the date you pay your staff.
Keep them for at least six years to satisfy a Revenue audit or a WRC inspection.
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