COUNTRY GUIDE
With its vibrant culture, robust economy, and skilled workforce, Ireland is recognised as a hub for business and innovation—and a great location for your expansion. Here’s what you need to know about Irish payroll and HR.
EUR
+353
12
24
Dublin
GMT+1
English and Irish
Jan 1st – Dec 31st
23%
12.5%
8.8 – 11.05%
20 – 40%
You’ll be welcome to open a branch of an existing corporation in Ireland. If setting up a new business, the most popular choices are:
Private Limited Company by Shares is the most popular business model in Ireland by some distance. There’s also the option to register for payroll purposes in Ireland without the need to set up a legal entity or branch.
Setting up a payroll in Ireland is usually a smooth and painless experience. The Irish authorities are business-friendly and actively seek to welcome new enterprise into the country. Your first step is choosing a company name, if you are not opening a branch of an existing business. In many respects, this will be the biggest challenge that you face. The Irish Companies Registration Office are very strict on company names. Rules and regulations include:
Once you have an appropriate name and have registered it with the Companies Registration Office, your business will need to register for tax repayments. All of this is achieved by filling in forms. Your business will likely be active within 10 days – often just a week.
You will not need to open a local bank account to do business in Ireland, though it would be an advantage to do so. You’ll have to wait until your business is active before you can open this account.
The average working week in Ireland is 40 hours and cannot exceed 48 hours by law. Employees frequently take a one-hour lunch break each day, where the desk is usually left, and phone calls and emails go unanswered. Employees are also entitled to unpaid 15-minute breaks after every consecutive 4 and 6 hours of work.
Expect to pay between 1.08 and 1.15 times an employee’s salary to accommodate tax and benefits. This is amongst the lowest rates in Europe.
There are a range of statutory pay requirements in Ireland, governing minimum wage, sick pay, various types of parental pay, and redundancy pay. Let’s take a look at the core considerations for each:
As of January 1st 2024, the hourly minimum wage in Ireland is €12.70 per hour. Some people will get sub-minimum rates depending on their age, as follows:
Age group | Minimum hourly rate | Percentage of minimum wage |
20 and over | €12.70 | 100% |
19 | €11.43 | 90% |
18 | €10.16 | 80% |
Under 18 | €8.89 | 70% |
Employees not entitled to the minimum wage include:
There is also specific guidance on what “does not count as pay” when calculating the minimum wage, such as overtime premium, unsocial hours premium, tips, redundancy payments, and more. Find more guidance here.
As of 2024, employees have a right to 5 days sick pay every year—a generous increase from 3 days in 2023. Statutory sick pay (SSP) is paid by your employer at 70% of your normal pay, up to a maximum of 110 per day. There are plans to gradually include how many days SSP employees can claim, reaching 10 days per year in 2026.
Employees need to have been working for at least 13 continuous weeks with their current employer before being eligible for statutory sick pay. Those on probation, interns, apprentices, and agency workers are also entitled to SSP.
Employees must be certified by a GP as unable to work in order to qualify for SSP, from day 1 of their sick leave.
If you wish to offer your own company sick pay scheme, it must be more favourable than statutory sick pay, and employees cannot claim both at the same time. SSP is only for employees who don’t have a workplace sick pay scheme or don’t qualify for it.
For those who exceed their 5 SSP days, they may be eligible to apply for Illness Benefit via Pay Related Social Insurance (PRSI).
The full maternity benefit in Ireland is €274 per week for 26 weeks (or 156 days).
The weekly paternity benefit in Ireland is also €274 per week, payable for 2 weeks.
Maternity and paternity benefits are payable via PRSI, not the employer.
Employees are eligible for statutory redundancy payment after 2 years of service in their company. Eligible employees are entitled to:
The maximum weekly amount used to calculate redundancy is €600 per week, or a €31,200 annual salary.
As an employer, you’re not required by law to offer any more than the statutory requirement.
In Ireland, you’re responsible for making a number of deductions from an employee’s salary during payroll, as well as making your own contributions as an employer. Here, we’ll cover what you need to know about the Irish tax and social security system:
There are just two scales of income tax in Ireland. Here are the income tax rates in Ireland for 2024:
Individual taxpayers:
Income range (EUR) | Tax rate |
Up to 35,300 | 20% |
Over 35,300 | 40% |
Married couples or civil partners (one income):
Income range (EUR) | Tax rate |
Up to 44,300 | 20% |
Over 44,300 | 40% |
Married couples or civil partners (two incomes):
Income range (EUR) | Tax rate |
Up to 70,600 | 20% |
Over 70,600 | 40% |
All employee tax contributions must be withheld at the point of salary release and submitted to Revenue Ireland.
Social security in Ireland, referred to as social insurance contributions, is called Pay Related Social Insurance (PRSI).
There are 11 different classes of PRSI, which fall broadly into:
Each class also consists of several subclasses, with most workers in Ireland pay Class A PRSI contributions. The current rates for Class A PRSI are:
Weekly income band | PRSI subclass | Employee rate | Employer rate |
€38 – 352 | A0 | 0 | 8.8% |
€352.01 – 424 | AX | 4% | 8.8% |
€424.01 – 441 | AL | 4% | 8.8% |
More than €441 | A1 | 4% | 11.05% |
General rates for other classes:
Class | Employee Rate | Employer Rate |
A | 4% | 8.8 – 11.05% |
B | 0.9 – 4% | 2.1% |
C | 0.9 – 4% | 1.85% |
D | 0.9 – 4% | 2.35% |
E | 3.33% | 6.87% |
H | 3.9% | 10.35% |
J | Exempt | 0.5% |
K | 4% | Exempt |
S | 4% | 4% |
If you require a full breakdown of subclasses outside of Class A, please visit Gov.ie here.
Universal social charge (USC) is an additional tax on incomes that exceed €13,000 gross per year. While employees pay no USC on incomes below €13,000 per year, once they exceed this limit they will pay USC on all income, not just that exceeding €13,000. The standard rates of USC in 2024 are as follows:
Rate | Income band |
0.5% | Up to €12,012 |
2% | From €12,012.01 to €25,760 |
4% | From €25,760.01 to €70,044 |
8% | €70,044.01 and over |
11% | Self employed income over €100,000 |
Reduced USC rates apply to those over the age of 70 with incomes of €60,000 or less, or medical card holders under the age of 70 with an income of €60,000 or less. Rather than the incremental rates outlined above, their maximum contribution will be 2% on incomes above €12,012.
Moving onto to the key areas you need to consider to make sure you stay fully compliant with Irish employment law, now, we’ll cover the various rules and legislation governing payroll and HR compliance in Ireland:
Payslips are required by law on or before each payday. They must include details on gross/wage salary, the nature and amount of each deduction, and the net wage/salary.
Employers must keep detailed payroll records for each employee for at least six years. These records should include personal details of the employee, total pay, deductions (tax, PRSI, USC etc.), net pay, and hours worked if relevant for the calculation of pay. These records must be available for inspection by the Workplace Relations Commision (WRC).
Since January 1st 2019, employers are required to comply with real time reporting, and must report pay, tax, other deductions, and information on employees to Revenue at the time that they are paying their employees. If you use payroll software, you can use Direct Payroll Reporting which communicates with Revenue Online System (ROS), or you can upload files to ROS manually.
You must also retrieve an up-to-date Revenue Payroll Notification (RPN) before you run your payroll. An RPN provides employers with the necessary information needed to deduct the correct income tax, USC, and local property from their employees. The right payroll software will be able to retrieve the relevant RPNs, or you can request them from Revenue.
There is no legal requirement to offer a company pension to employees in Ireland. If your business does not offer a pension, you must advise employees about a Personal Retirement Savings Account, or PRSA. Your role will be purely advisory. You do not need to pay into the scheme to match contributions, though you are welcome to do so.
When onboarding new employees, they will need:
Terminating an employee in Ireland is a complex process due to the extensive rights afforded to employees. Employers must carefully consider their hiring decisions as it can be challenging to part with an underperforming employee. Typically, new hires are placed on a six-month probation period.
In cases of gross misconduct, such as theft, acts of violence, or intoxication at work, dismissal can be more straightforward. However, for issues like poor performance or timekeeping, the process is lengthier, involving multiple verbal and written warnings and performance improvement programs.
Unfair dismissal is a common legal claim in Ireland, so employers need to have a substantial reason for termination, usually revolving around gross misconduct. Examples include aggression towards colleagues or customers, theft, or working under the influence of drugs or alcohol. Documentation and evidence of such transgressions are essential.
Upon termination, an employee can request a written explanation of their dismissal, which must be provided within 14 days. If the employee deems this justification unjust or inaccurate, they can file a case for unfair dismissal.
Employers are required to provide a final payslip and any outstanding salary upon severance. The amount of severance pay varies based on the employee’s length of service. Additionally, employees who have worked for at least 13 weeks are entitled to a notice period of at least one week, which can extend up to eight weeks after 15 years of service. In the case of redundancy, employees are entitled to two weeks’ pay per year of service, plus an extra bonus week.
Finally, when an employee leaves, the employer must update the Revenue online system with all pertinent details, including the date of departure, final pay, and deductions.
If the employee has an EU or EAA passport, they will be free to work without restriction. Anybody else will be subject to work permit or visa, which must be approved by the Irish government. If a prospective employee does not hold an EU or EEA passport, they will be unable to work in Ireland without a visa or work permit. The most common examples of these documents include:
Majority of statutory benefits required in Ireland are those employees can access thanks to their contributions to PRSI. The social welfare system allows contributors to access a range of benefits such as state pension, public healthcare, jobseekers benefit, illness benefit and more. Additionally, employees are entitled to:
Supplementary benefits that will help you stand out as a competitive employer include:
Most employees in Ireland are legally entitled to 4 weeks of paid leave per leave year, in addition to 9 public holidays, but this can vary depending on working patterns. Other calculation methods include:
Annual leave accrues during the time an employee works, but also during some statutory leaves, including maternity, parental, adoptive, and sick/illness up to a maximum of 15 months.
Timing of annual leave is determined by the employer, considering the needs of the business, and taking into account the employee’s need for rest.
Employees must give at least one month’s notice before they are required to take their annual leave.
Employees are paid their normal wages for the annual leave period. If pay varies, it’s calculated based on the average page over the 13 weeks before taking the leave.
Ireland observes nine public holidays each year, commonly known as bank holidays. These holidays are:
On these public holidays, most businesses and schools are closed, and workers are entitled to certain benefits if they are required to work on these days.
Pregnant employees are entitled to 26 weeks of maternity leave. Following this period, they have the option to take up to 16 additional unpaid weeks.
During maternity leave, employees may qualify for Maternity Benefit from the Department of Social Protection if they have sufficient Pay Related Social Insurance (PRSI) contributions. This benefit is not paid by the employer but through the social welfare system. The payment is subject to a person’s PRSI contribution history and is paid for up to 26 weeks.
Pregnant employees, or those who have recently given birth, may also be entitled to health and safety leave if there are specific risks to their health and safety at work that cannot be removed or reduced. They are also entitled to take reasonable time off work without loss of pay for prenatal care (e.g., medical appointments, antenatal classes). This also includes time off for medical visits after the birth.
Dismissing an employee because they are pregnant, on maternity leave, or have availed of rights related to pregnancy or childbirth, is unlawful and can be challenged as unfair dismissal.
For up to six months after return to work, breastfeeding mothers are entitled to take time off from their job each day to breastfeed or express milk. This can be a reduction of working hours without a reduction in pay.
New fathers are entitled to 2 weeks of paternity leave. This can be taken at any time within the first six months following the birth of adoption of the child. Employees must inform their employers at least 4 weeks before the intended start date of the paternity leave, and this notice should include expected date of birth or adoption and the proposed start date of the paternity leave. Employment rights are fully protected during paternity leave, including preservation of job and all related employment benefits.
Parental leave in Ireland is a statutory entitlement that allows parents to take up to 26 weeks unpaid leave from work to spend time caring for their children. This type of leave is separate from maternity and paternity leave.
It’s available to parents, adoptive parents, and in certain cases acting guardians. It is generally available for children up to 12 years of age, but this may be extended in cases of disability or long-term illness.
The leave can be taken in one block, or, with the employer’s agreement, in separate blocks of a minimum of six weeks. There must be a gap of at least 10 weeks between the blocks.
Employees must provide written notice of six weeks before taking parental leave.
Employee rights are fully protected during this leave, and it is unlawful for an employer to dismiss an employee or treat them unfavourable for haven taken or requested parental leave.
Carers leave: Up to 104 weeks of unpaid leave to provide full-time care and attention to someone in need of it due to age, illness, or disability.
Adoptive leave: Similar to maternity leave, it allows an adopting mother or a sole male adopter to take 24 weeks of leave starting from the day of the child’s placement.
Force majeure leave: Paid leave for urgent family reasons in cases of illness or injury of a close family member, limited to three days in a 12-month period or five days in a 36-month period.
Compassionate leave: Not legally mandated, but many employers offer paid or unpaid leave for family emergencies or bereavements.
Jury service leave: Employees are entitled to time off to attend jury service. There is no statutory obligation for employers to pay employees during this time, but many choose to do so.
Public duties leave: Time off for employees who hold public positions (e.g., local council members) to carry out their duties, typically unpaid.
Ireland offers a favourable corporate tax rate at just 12.5%, making it the ideal location to set up a new business. A subsidiary company is best, and a Limited Company is the most popular subsidiary business model in Ireland.
You’ll also need at least one director and a company secretary. These positions cannot be held by one and the same individual. The company secretary is a senior executive that handles elements of corporate responsibility, ensuring the business acts in a legally compliant way at all times.
Alternatively, you could open a branch of your existing business in Ireland. As with a subsidiary company, this need to be conducted through the CRO.
Opening a branch in Ireland takes a little longer, and any debts or legal difficulties will become the responsibility of the parent company. However, any profits generated by the Irish branch will only be subject to the 12.5% tax rate. If you’re a new or start-up business, you may even qualify for tax relief during your first 3 years of trading.
Setting up an entity in Ireland is a fast process. You should be good to go within around 10 days. It could be closer to 4 to 6 weeks before you’re ready to start making hires for your payroll though.
A business needs at least one director, which must be a resident of the EU and EAA. If this not the case, a resident’s bond will be necessary. This is essentially an insurance policy for the Irish authorities, ensuring that if the director leaves their post, they cannot leave unpaid debts behind.
There is no minimum share capital for setting up a limited company in Ireland. You can get started with as little as €1, but some experts recommend ensuring you have at least €100.
PRSI stands for Pay Related Social Insurance. This is the social security program that Irish employers and employees need to pay into monthly. Basically, it is Ireland’s welfare tax.
Yes, under a protocol known as Section 486C. Start-up businesses that owe less than €40,000 in corporate tax can apply for this relief for their first three years of trading. Businesses that accrue a corporate tax bill between €40,000 and €60,000 can apply for partial relief in this same timeframe.
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Email: info@cintra.co.uk
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