Payroll in Ireland

What does the payroll process in Ireland involve?

Whether you’re hiring a full time employee or a contractor, you’ll need to be aware of all of the components of a payroll workflow in Ireland. This includes:

• Collecting the individual’s personally identifying information - i.e. name, address and RPNs.

• Calculating gross pay - the monthly wage of the employee based on their number of hours worked and rates. 

• Calculating net pay - the pay that the worker takes home after tax and social security contributions.

• Paying wages - either through bank deposit or cheque.

• Reporting and paying taxes - the employer is responsible for withholding and transferring the employee’s income tax as well as Universal Social Charge (USC) contributions.

On first glance, this payroll workflow may appear familiar to the system in your country. And it might be! But while payroll does share some similarities across borders, there are differences that must be complied with at all times. 

For instance, there are only two tax brackets in Ireland: 20% and 40%. And these thresholds can vary depending on whether the employee is single, married, or widowed. 

If you don’t want the burden of taking on payroll in Ireland by yourself, that’s completely understandable. Let Skuad take care of paying your workers and taxes on your behalf.

What do you need to know about payroll in Ireland?

A few Ireland payroll basics

Employees in Ireland are paid in the Euro (€, EUR) currency. Salaries can either be paid weekly or monthly, though payments must be paid by the last day of each month. 

Working hours in Ireland

The full-time working week in Ireland is set at 39 hours. 

In a seven day period, employees are entitled to at least one 24 hour rest period. Unless the employment contract states otherwise, this rest period should be on a Sunday. 

It’s the responsibility of the employer to make sure that the employee gets enough rest, as stipulated by The Organization of Working Time Act 1997. 

Overtime rules in Ireland

Overtime in Ireland is regulated within employment contracts as well as collective agreements. Any work that is completed over the standard working week in Ireland is paid as overtime.

While it is common for workers to receive higher levels of pay for work completed in overtime, there are no statutory levels of overtime pay, nor are employees legally entitled to it. 

Minimum wage requirements in Ireland

As of 2022, the national minimum wage in Ireland is currently at €10.50 per hour. 

A full-time employee would be entitled to a monthly minimum wage of €1,774.50, which equates to €21,294 per year. 

Severance pay in Ireland

When an employment contract is terminated in Ireland, the employee will receive any outstanding wages that they are owed, along with a payslip. This payment may include reimbursement for any annual leave that was earned but not taken. 

Other than that, employers are not legally required to pay severance pay to employees that have been terminated. 

It works a bit differently if the employee was made redundant. Redundancy pay consists of two weeks of pay, as well as a bonus week. Though if the employee has worked at the company for more than five years, they’re eligible to 11 weeks of pay. This pay is capped at €600 per week. 

Feeling overwhelmed by payroll compliance in Ireland? Pass the responsibility over to Skuad and book a demo today.

Ireland payroll taxes and deductions

The following contributions have to be made by employers and employees in Ireland:

Employer contributions

Social Security (PRSI) 

• Up to €410 - 8.80%
• Above €410 - 11.05%

Employee contributions

• Social Security (PRSI) - 4%
• Universal Social Charge (USC) - 0.5% - 11%

Income tax

Income tax in Ireland is deducted from the employee’s salary by the employer, through the Pay As You Earn (PAYE) system. Some employees may be entitled to tax relief through Ireland’s tax credit system, depending on age, personal life or disability. 

As of 2022, the income tax brackets in Ireland are:

For workers who are single or widowed without children

• Up to €36,800 = 20%
• More than €36,800 = 40%

For workers who are single or widowed and qualify for Single Person Child Carer Credit

• Up to €40,800 = 20%
• More than €40,800 = 40%

For workers who are married with one or two household incomes

• Up to €45,800 = 20%
• More than €45,800 = 40%

Get your employee tax and contributions right in Ireland with the help of Skuad.

Employee leave entitlement in Spain

Public holidays

There are nine public holidays each year in Ireland:

• New Year's Day- Mon, 3 Jan
• St. Patrick's Day- Thu, 17 Mar
• Easter Monday- Mon, 1 8 Apr
• Early May Bank Holiday- Mon, 2 May
• June Bank Holiday - Mon, 6 Jun
• August Bank Holiday- Mon, 1 Aug
• October Bank Holiday- Mon, 31 Oct
• Christmas Day- Sun, 25 Dec
• St. Stephen's Day- Mon, 26 Dec

Paid annual leave

According to The Organization of Working Time Act 1997, employees in Ireland are entitled to four weeks of paid leave, though many companies do offer more. 

Part-time employees are entitled to 8% of their hours worked and this is limited to four working weeks per year. 

Sick leave

Employers haven't been legally required to pay sick pay in Ireland, though many still elected to pay their employees during sick leave. 

However, there are plans to establish statutory sick pay, through the Sick Leave Bill 2021, which will come into effect in 2022.

An Irish employee under the age of 66 that has contributed enough to PSRI can receive an Illness Benefit paid by the Department of Social Protection. 

The employee needs to obtain a medical certificate to prove that they were unwell, so that the time off is reported as sick leave, rather than annual leave. 

Maternity / Paternity leave

The standard weekly rate of maternity leave is at €245.

This type of leave grants 26 weeks off (156 days) to mothers, with the option for an additional 16 weeks of unpaid leave. The mother must take at least two weeks of this maternity leave before the due date, as well as four weeks following the birth. 

Paternity leave in Ireland is five weeks, though in July 2022, this will increase to seven weeks.

Paternity leave may be taken at any time in the six months post birth - or placement in the case where a child has been adopted.

A parent qualifies for paternity leave if they are:

• The father of the child.
• The partner of the mother of the child.
• The parent of a child that has been conceived through a donor.

Employers are not legally obligated to pay for maternity or paternity leave. The employee’s entitlement to payment is down to whether or not they have made sufficient contributions to PRSI. 

Parental leave

Parental leave allows up to 12 weeks off for parents of children under the age of 12. Employees must have been employed for at least a year to be entitled to parental leave and must request this leave at least six weeks beforehand.

In Ireland, adoptive leave entitles one of the adoptive parents to 24 weeks of unpaid leave once the child is in their care.

The Family Leave and Miscellaneous Provisions Bill 2021 has just been passed in Ireland, which entitles payment to both parents for children born since November 2019. This bill rectifies the loophole that previously existed for male couples who were adopting children. 

Speak to a member of the Skuad team to understand what is expected of your business when hiring in Ireland.

Payroll compliance in Ireland

You must ensure that your company meets the statutory requirements concerning your employees, files the correct amount of tax, and complies with payroll regulations. 

If not, your business may face hefty fines and strict penalties. 

Want the stress of compliance off your hands? Book into a demo with Skuad today.

Payroll providers in Ireland: how to start building your team?

When hiring workers based in Ireland, you have a number of options.

You could handle all of the HR in-house, taking on the responsibility of complying with Irish payroll and taxes. Your second option would be to outsource payroll in Ireland, while continuing to manage HR and payroll for employees in your local region in-house. 

Your third option would be to tie all of your HR and payroll duties for all geographical regions into one, streamlined system.

A global payroll provider like Skuad brings endless benefits to companies hiring abroad. 

Simple workflow

Tired of getting to grips with several HR teams and payroll solutions? Keep all of your HR and payroll data and information together in one, simple dashboard. 

Stay compliant

Skuad’s team of payroll and employment law experts are brushed up on Irish payroll regulations, tax requirements and everything else that you need to stay compliant. 

Better employee experience

Our solution gives you access to better exchange rates and competitive benefits packages. Skuad ensures an unrivaled onboarding experience for your employees, so that they can put the most into their roles at your company. 

Flexible hiring

With Skuad, you’ll have hiring access to over 160 countries. No matter where talent is based in the world, you can recruit them to work remotely for your company with ease. 

Ready to begin your hiring journey in Ireland? Book a platform demo with Skuad today to see how we can help your business to scale.