Payroll in Ireland
Capital
Dublin
Official Language
English, Irish
Currency
Euro
Payroll cycle
Monthly or weekly
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.
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.
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:
Create an account with Revenue Online Service (ROS), and select “Manage Tax Registrations” on the “My Services” page.
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:
Register with the Irish Revenue Commissioner (Revenue)
Register with workplace safety boards, if necessary
Find out what deductions you need to make, if any
Set up new employees
Open a payroll program account
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
Working hours
Work weeks are 39 hours. Work weeks can't exceed 48 hours on average per week over 4 months in a row.
Employees must get 24 hours of consecutive rest in a 7 day period. You employer can provide two 24-hour periods of rest if you did not get 24 hours of consecutive rest in the previous week. Your 24 hour rest period should include a Sunday.
The standard work week in Ireland is Monday-Friday.
Overtime
In Ireland, there are no statutory regulations for overtime pay. Most employers, however, pay employees a standard overtime rate that is stipulated in their employment contract.
Paid time off
Paid time off agreements must be stipulated in the employment contract. Employees are provided with 4 weeks of mandatory paid time off, though many employers choose to give their employees even more time off for vacation.
There are 9 public holidays in Ireland employees are required to have off.
Sick days
Employees are entitled to 3 paid sick days per year after 13 continuous weeks of service. Employees must provide a medical certificate in order to be approved for sick pay.
Sick pay is paid at 70% of the employees regular salary up to a maximum of $110 EUR.
Maternity leave
New mothers are entitled to 26 weeks of maternity leave. They can receive an extra 16 weeks of unpaid leave that can begin when the 26 weeks begins. Employees must take at least 2 weeks prior to the birth and 4 weeks after.
Whether the leave is paid or not depends on how much the mother has contributed to the social security fund (PRSI):
At least 39 weeks of payment in the PRSI paid in the 12 months before the due date
At least 39 weeks of payment in the PRSI paid since first starting to work and at least 39 weeks of PRSI paid in the relevant tax year or the tax year immediately following
At least 26 weeks of payment in the PRSI paid in the relevant tax year and at least 25 weeks of PRSI paid in the previous tax year
If the criteria is met, the maternity pay is $245 EUR per week.
Paternity leave
New fathers are entitled to 7 weeks of paternity leave that can start within 6 months of the birth or adoption of a child.
This includes:
The father of the child
The partner of the mother of the child
The parent of a donor-conceived child
Employers are not required to pay the employee for this leave, but if the new father has contributed enough to the PRSI fund, then they may be entitled to the Paternity Benefit fund.
Parental leave
New parents are entitled to 26 weeks of parental leave for children up to 12 years old.
Employees must have been employed for at least 1 year and provide their employer with a written request for parental leave 6 weeks prior.
How to perform payroll in Ireland
To perform payroll in Ireland, you will need to take the following 6 steps:
Register with the Irish Revenue Commissioner (Revenue)
Register with workplace safety boards, if necessary
Find out what deductions you need to make, if any
Set up new employees
Open a payroll program account
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
Working hours
Work weeks are 39 hours. Work weeks can't exceed 48 hours on average per week over 4 months in a row.
Employees must get 24 hours of consecutive rest in a 7 day period. You employer can provide two 24-hour periods of rest if you did not get 24 hours of consecutive rest in the previous week. Your 24 hour rest period should include a Sunday.
The standard work week in Ireland is Monday-Friday.
Overtime
In Ireland, there are no statutory regulations for overtime pay. Most employers, however, pay employees a standard overtime rate that is stipulated in their employment contract.
Paid time off
Paid time off agreements must be stipulated in the employment contract. Employees are provided with 4 weeks of mandatory paid time off, though many employers choose to give their employees even more time off for vacation.
There are 9 public holidays in Ireland employees are required to have off.
Sick days
Employees are entitled to 3 paid sick days per year after 13 continuous weeks of service. Employees must provide a medical certificate in order to be approved for sick pay.
Sick pay is paid at 70% of the employees regular salary up to a maximum of $110 EUR.
Maternity leave
New mothers are entitled to 26 weeks of maternity leave. They can receive an extra 16 weeks of unpaid leave that can begin when the 26 weeks begins. Employees must take at least 2 weeks prior to the birth and 4 weeks after.
Whether the leave is paid or not depends on how much the mother has contributed to the social security fund (PRSI):
At least 39 weeks of payment in the PRSI paid in the 12 months before the due date
At least 39 weeks of payment in the PRSI paid since first starting to work and at least 39 weeks of PRSI paid in the relevant tax year or the tax year immediately following
At least 26 weeks of payment in the PRSI paid in the relevant tax year and at least 25 weeks of PRSI paid in the previous tax year
If the criteria is met, the maternity pay is $245 EUR per week.
Paternity leave
New fathers are entitled to 7 weeks of paternity leave that can start within 6 months of the birth or adoption of a child.
This includes:
The father of the child
The partner of the mother of the child
The parent of a donor-conceived child
Employers are not required to pay the employee for this leave, but if the new father has contributed enough to the PRSI fund, then they may be entitled to the Paternity Benefit fund.
Parental leave
New parents are entitled to 26 weeks of parental leave for children up to 12 years old.
Employees must have been employed for at least 1 year and provide their employer with a written request for parental leave 6 weeks prior. 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.
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.
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.
