Hotel and hospitality businesses are being warned to get their accounts in order ahead of the new Auto-Enrolment Retirement Savings Scheme.

The scheme, which becomes law on September 30th, introduces mandatory employer contributions and new administrative requirements.

Pension experts are warning the new policy will be "a significant shift for the sector—particularly for businesses that have never had to manage workplace pensions before."

Auto-enrolment will apply to employees aged 23 to 60 who earn €20,000 or more per year and are not already in a pension scheme.

Employers must match employee contributions, while the State will provide a top-up of €1 for every €3 paid by staff.

The under-pressure hospitality sector faces additional payroll costs starting at 1.5% of gross salaries (capped at €80,000 per employee) in year one, but this rises to 6% within a decade.

The move towards auto-enrolment comes as retirement planning awareness grows.

According to the Central Statistics Office (CSO), 66% of workers aged 20- 69 now have some form of private pension, up from 65% in 2020 and just 60% in 2019.

However, while the average pension pot currently stands at €111,000, many workers—particularly those in lower-paid and transient industries like hospitality—still lack retirement savings.

Worryingly, almost eight in ten employers are not properly prepared for the introduction of pension auto-enrolment, new research published last month shows.

David Maguire, Assistant Tax Manager at HLB Ireland, who has extensive experience working with hospitality and hotel businesses on this issue urged owners to start preparing now.

"For many hospitality businesses, this is the first time they’ll need to manage pension contributions, and the financial and administrative impact cannot be underestimated.

"While contributions will be phased in gradually, costs will more than quadruple within a decade.

"If owners don’t plan ahead, they risk major cash flow and compliance challenges."

The busiest period for hospitality businesses begins around St. Patrick’s Day, meaning employers who delay preparations will be too busy later to ensure a smooth transition.

"From March onwards, hotels, restaurants, and pubs are completely focused on operations.

"If businesses don’t get their systems in place now, they’ll be scrambling to comply just as their peak season winds down—and that’s a risk they can’t afford to take," Maguire warned.