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Payroll in Ireland

All Countries > Ireland
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Capital

Dublin

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Official Language

English, Irish

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Currency

Euro

Payroll Desktop

Payroll cycle

Monthly or weekly

Via offers complete Payroll, EOR and Contractor mangement services for Ireland
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Quick facts about Ireland

Ireland is home to a number of major tech companies, including Microsoft, Apple, and Meta. Known as a friendly country with high levels of education, Ireland is a booming talent hotspot for companies looking to recruit top talent. With significant growth in sectors such as IT, energy, environmental engineering, and medical devices, the country is quickly becoming one of the most important economies in the European Union.

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What is payroll in Ireland?

Payroll in Ireland is the process of managing payments, benefits, payroll deductions, compliance, and taxes for full-time employees and contractors. Companies without an entity in the country can run payroll by partnering with an EOR service like Via.

When companies establish a business presence in the Republic of Ireland, they will need to either build out a payroll process or partner with a third-party EOR service.

Here, we go into detail about what payroll in Ireland requires, so global employers can better understand how to establish business in Ireland and pay their employees compliantly.

Global Payroll

Establishing payroll In Ireland

The first step as a new employer in Ireland is registering for Pay As You Earn (PAYE). To do this, you can use eRegistration. There are two primary ways:

  1. Create an account with Revenue Online Service (ROS), and select “Manage Tax Registrations” on the “My Services” page.

  2. Make a myAccount, and select “Tax Registrations” on the “Manage My Record’’ card.

To ensure compliance, you will need to register new employment and submit payroll information to Revenue before making employee payments.

What is Revenue?

Revenue is the term for Revenue Online Service or the Irish Revenue Commissioner.

All employers in Ireland must report payroll details to Revenue each time an employee is paid (on or before the pay date) and pay Revenue the relevant tax deductions at the correct corporate tax rate. If you plan to pay employees once a month, you need to file monthly payroll submissions. If you pay them weekly, you’ll have to submit them each week.

If you can’t pay your employees during a month, Revenue will contact you with a nil statement by the 5th of the following month that shows your liability, based on the payroll submissions. Accepting the statement by the 14th of that month will become a nil monthly statutory return. Revenue will declare it a nil monthly statutory return if you don’t accept it.

To perform payroll in Ireland, you will need to take the following 6 steps:

  1. Register with the Irish Revenue Commissioner (Revenue)

  2. Register with workplace safety boards, if necessary

  3. Find out what deductions you need to make, if any

  4. Set up new employees

  5. Open a payroll program account

  6. Calculate deductions and contributions

Pay cycle

Employees in Ireland are paid either weekly or monthly. Employers must pay employees by the last day of the month.

Tax year

The fiscal year in Ireland runs from the 1st of January to the 31st of December.

Minimum wage

The national minimum wage in Ireland is $10.50 per hour.

Rates are based on ages:

  • Over 20: $10.50 EUR

  • 19 years old: $9.18 EUR

  • 18 years old: $8.16 EUR

  • Under 18: $7.14 EUR

Employee pay details

Each payroll submission must include the following employee information:

Wages/salary

  • Gross income

    • Wages

    • Salaries

    • Overtime

    • Holiday pay

    • Bonuses

    • Commission

  • Pay for income tax

  • Pay for Pay Related Social Insurance (PRSI)

    • Personal Retirement Savings Accounts (PRSA)

    • Approved Revenue Funds (ARFs)

    • Approved permanent health insurance

  • Income tax paid

  • PRSI class and subclass

  • Employee PRSI paid

  • Employer PRSI

  • Universal social charge (USC) paid

  • Permanent Health Benefits (PHB)

Benefit information

Some benefit information will also be included in pay stubs, including:

  • Company share-based remuneration

  • Earnings for the year

  • Taxable benefits

  • Contributions to retirement funds

  • Taxable lump sum

  • Employment Wage Subsidy Scheme (EWSS)

Additional Requirements

In some circumstances, you might need to include additional information in your employee’s pay details:

  • Pay date

  • Employment start date (when first starting)

  • Date of leaving (after notification of leave)

  • Revenue Payroll Notification (RPN) number

  • Medical insurance premium

  • Employee exempt from PRSI

  • Employee exempt from USC

  • Pay frequency

  • Employment ID

How to perform payroll in Ireland

To perform payroll in Ireland, you will need to take the following 6 steps:

  1. Register with the Irish Revenue Commissioner (Revenue)

  2. Register with workplace safety boards, if necessary

  3. Find out what deductions you need to make, if any

  4. Set up new employees

  5. Open a payroll program account

  6. Calculate deductions and contributions

Employee pay details

Each payroll submission must include the following employee information:

Wages/salary

  • Gross income

    • Wages

    • Salaries

    • Overtime

    • Holiday pay

    • Bonuses

    • Commission

  • Pay for income tax

  • Pay for Pay Related Social Insurance (PRSI)

    • Personal Retirement Savings Accounts (PRSA)

    • Approved Revenue Funds (ARFs)

    • Approved permanent health insurance

  • Income tax paid

  • PRSI class and subclass

  • Employee PRSI paid

  • Employer PRSI

  • Universal social charge (USC) paid

  • Permanent Health Benefits (PHB)

Benefit information

Some benefit information will also be included in pay stubs, including:

  • Company share-based remuneration

  • Earnings for the year

  • Taxable benefits

  • Contributions to retirement funds

  • Taxable lump sum

  • Employment Wage Subsidy Scheme (EWSS)

Additional Requirements

In some circumstances, you might need to include additional information in your employee’s pay details:

  • Pay date

  • Employment start date (when first starting)

  • Date of leaving (after notification of leave)

  • Revenue Payroll Notification (RPN) number

  • Medical insurance premium

  • Employee exempt from PRSI

  • Employee exempt from USC

  • Pay frequency

  • Employment ID

Payroll taxes in Ireland

Each employee in Ireland is responsible for registering for payroll taxes with the Irish Revenue Commissioners. This allows employers to report the correct payments and deductions to Revenue. Employers must send a report to Revenue each time they pay an employee, and this report should include all Ireland payroll details, including tax deductions.

Deductions

Employers must process the following Ireland payroll deductions from their employees’ gross pay:

  • Income tax (IT): the taxed percentage of income–up to a certain amount is taxed at 20% (the Standard Rate) and the remainder is taxed at 40% (the Higher Rate)

  • Pay Related Social Insurance (PRSI): social insurance contributions that go to the Social Insurance Fund (SIF), helping pay for Social Welfare benefits and pensions

  • Universal Social Charge (USC): a taxed percentage of income that replaced both the income levy and the health levy (the health contribution)

  • Local Property Tax (LPT) (if relevant): a self-assessed tax charged on the market value of residential properties, completed each year.

Payroll contributions 

Employer payroll contributions:

  • 8.80% - 11.05%: Social Security

Total cost: 8.80% to 11.05%

Employee contributions: 

  • 4.00%: Social Security

  • 0.50-11.00%: Universal Social Charge

Total cost: 

  • 4.50% to 12.00%

Employee income tax

Single or widowed with no children:

  • 20%: On income up to $36,800 EUR

  • $7,360 EUR + 40%: On Income over $36,800 EUR

Married couple, one household income:

  • 20%: On income up to $45,800 EUR

  • $9,160 EUR + 40% On income over $45,800 EUR

Married couple, two household incomes

  • 20%: On income up to $73,600 EUR

  • $14,720 EUR + 40%: On income over $73,600 EUR

Common interest and penalties

If you fall out of compliance with global payroll, you could face one of the Value-Added Tax (VAT) penalties, each of which results in a €4,000 fine:

  • Failure to register as an accountable person

  • Didn’t charge VAT or pay it to Revenue

  • Failure to pay at or above the national minimum wage

  • Didn’t comply with invoice requirements

  • Improper book and record keeping

  • Supply a VAT invoice from a non-registered person

  • Unauthorized charge of flat-rate addition

  • Prevent Revenue from inspecting property for VAT purposes

  • Supply taxable resources, breaching the requirement of security

The following lists some VAT penalties for deliberate or careless behavior:

  • Carelessly create an incorrect return

  • Incorrect claim or declaration

  • Fail to file a due return

Managing taxable benefits

As you build out your payroll system in Ireland, you will also want to keep track of taxable benefits, also referred to as non-cash benefits. They exclude share-based remuneration but include shares in other companies that aren’t from one of your parent companies.

Here is a list of some taxable benefits from an employer:

  • Free or subsidized accommodation

  • Company charge cards

  • Childcare facilities

  • Company cars or vans

  • Preferential loans

  • Meal vouchers

  • Medical insurance premiums

  • Sports and recreation facilities

Income Tax (IT), if paid weekly, is calculated by:

  • Applying 20% to the income in your weekly rate band

  • Applying 40% to any income above your weekly rate

  • Adding the two amounts above together

  • Deducting your weekly tax credits from this total

Universal Social Charge is calculated by applying USC rate bands to your income. If you earn more than the exemption limit (€13,000 in 2022), you pay a social charge on the full income. Your statement of liability includes a universal social calculation.

Welcome

In-house payroll vs. third-party global payroll outsourcing in Ireland

You may want to set up an Ireland payroll with an in-house hire, especially if your business structure is more corporate. However, this would probably require establishing a network in Ireland. This process could be long and frustrating, leading to delays and negatively affecting business.

An alternative solution is to partner with a third-party service, such as an employer of record (EOR). The employer of record will help build your global payroll and handle the administrative and compliance work that goes along with it.

Why companies partner with Via

Making the right decision for hiring your workforce in Ireland can be tricky. Both large and small companies in the United States and elsewhere want to hire Irish residents, but are unsure of how to navigate the country’s payroll and employment laws. Via makes hiring Irish talent and building your global team seamless. Our easy-to-use platform helps you manage the local HR processes for benefits, global payroll services, background checks, and more. We have a local team of lawyers and on-the ground experts that understand compliance as you expand abroad.

As your employer-of-record/entity in Ireland, Via assumes responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team. Our goal is to help you navigate the employer and employee relationship seamlessly.

With Via’s transparent pricing, you can pay full-time employees or contractors in Ireland with no hidden set-up fees, no foreign exchange or transaction fees, and no minimums–start with 1 employee and scale up at your own pace.

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Frequently asked questions

  • How do I do payroll in Ireland?

    Ireland payroll is performed by calculating employee earnings and withholding the correct income and social taxes, in addition to sending relevant reports to Revenue. You will also need to make sure you have infrastructure for paid leave, paternity leave, pay for public holidays, and other benefits for your workers in Ireland.

  • How often is payroll in Ireland?

    Ultimately, employers determine how often payroll happens. Most employers run global payroll monthly to reduce administrative burden, such as running payroll calculations, producing reports, and submitting the required info to Revenue.

  • What does an employer pay for an employee in Ireland in terms of benefits?

    Employers are responsible for taking tax, PRSI, and Universal Social Charge deductions from employee wages and sending them to Revenue through the PAYE system. They also contribute to employer’s Paying Social Insurance (PRSI). This is also known as social security contributions.

  • How do I close a payroll account if my business is being closed?

    You must apply for a letter of no objection from Revenue, ensuring that your company’s statutory filing requirements are up-to-date and that there’s no objection to you closing your company.

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