Navigating the Payroll Changes Ahead
Over the next four years, Irish businesses will see a significant transformation in payroll regulations, systems, and compliance obligations. From SEPA file updates to pension auto-enrolment and gender pay gap reporting, employers need to act now to prepare for what’s coming.
SEPA File Changes: Technical Updates on the Horizon
Beginning in October 2025, the European Payments Council (EPC)’s SCT 2025 Rulebook Directive will introduce new technical requirements for SEPA payroll processing. Employers will be required to use updated file formats for SEPA payments. Then, from November 2026, SEPA files must include structured address information.
While these may seem like behind-the-scenes changes, they will require careful planning and system updates to ensure that payroll continues smoothly and without disruption.
PRSI Changes: Immediate Impact for 2025
The first major payroll changes come into effect on 1 January 2025, when the PRSI threshold will increase from €496 to €527 per week — offering some financial relief to lower-paid workers.
More significantly, from October 2025, PRSI rate increases will be introduced for almost all classes (except Class M), starting with:
A 0.1% increase in October 2025
0.15% increases in both 2026 and 2027
A final 0.20% increase in October 2028
These incremental changes will impact employees, employers, and the self-employed. They will also require clear budgeting and internal communication so that employees understand how their take-home pay may be affected.
Gender Pay Gap Reporting: Transparency Becomes Mandatory
First signed into law in July 2021, gender pay gap reporting becomes mandatory for companies with 50 or more employees in 2025.
Here’s how the timeline works:
A snapshot of employee data must be taken in June
The review must cover the 12 months prior
Reports must be submitted within five months — by November
To support this process, the government will launch a dedicated reporting portal in Autumn 2025.
Looking ahead, the EU Pay Transparency Directive will introduce additional reporting requirements between 2026 and 2027, including:
Rights to access pay information
Transparency on pay before employment
Enhanced gender pay gap reporting duties
Pension Auto-Enrolment: Major Changes for 2026
The new pension auto-enrolment system, postponed to January 2026, will represent one of the most significant shifts in Irish payroll management.
Under this system, eligible employees will be automatically enrolled if they:
Earn over €20,000 annually
Are aged between 23–60
Are not already in a pension scheme
Employers will need to register on the NAERSA portal by this autumn to be ready.
It’s important to note that the scheme excludes:
Self-employed individuals
Non-earning voluntary contributors
Existing members of PRSAs or other pension schemes
Failure to comply could result in fines and penalties, so early preparation is essential.
Planning Ahead
These changes will significantly increase the complexity of payroll in Ireland. Employers should begin preparing now by:
Reviewing internal payroll processes
Consulting with payroll specialists
Updating systems and training staff
Success lies in early planning, clear communication, and working with experienced professionals who understand this evolving regulatory environment.
By staying ahead, your business can remain compliant, minimise disruption, and keep employees informed about how these changes may affect their compensation and benefits.
Our team at NKC can help you prepare for upcoming payroll and compliance obligations. Get in touch to discuss how we can support your business through each stage of transition. Contact Phil at plawlor@nkc.ie.