Payroll & Employment Guide Ireland

In Ireland, employers are legally required to provide employees with a written statement outlining the terms and conditions of employment within two months of starting. This document must include key details such as job title, pay, working hours, and other essential terms.

Employers can choose from various types of contracts depending on the nature of the role, including permanent, fixed-term, temporary, and casual contracts.

Notice periods: One week for employees; one to eight weeks for employers, depending on the employees’ length of service

Termination of employment: Grounds for termination of employment include redundancy, misconduct, or capability issues.

Employers in Ireland are required to provide mandatory employment benefits as outlined by national labour laws. To stay competitive, many also offer additional perks beyond the legal minimum. Understanding both is key to attracting and retaining top talent.

In Ireland, both employers and employees contribute to pay-related social insurance (PRSI), which funds social insurance benefits such as pensions, unemployment benefits, and maternity leave.

Employers typically pay 11.05% of gross earnings for Class A PRSI, while employees contribute 4%. These contributions are reported through the PAYE (Pay As You Earn) system and must be submitted on time to ensure compliance with labour laws. PRSI plays a crucial role in providing financial support to individuals during retirement and periods of unemployment.

Ireland has both a public and a private health system. All Irish residents can access public health services, typically at no cost. However, it is common for employers to offer additional private health coverage, which provides shorter wait times and access to more specialised care.

Employers in Ireland may offer occupational pensions to their employees, but there is no legal requirement to do so. Larger companies often provide supplemental pension schemes for their workforce, while smaller employers typically do not. The Pensions Authority regulates these pension schemes, each of which has its own specific rules.

Other possible employee benefits

Annual leave - A basic annual paid leave entitlement of four weeks (20 working days), although an employee’s contract may offer a greater amount. For part-time workers, the entitlement is calculated at 8.00% of the hours worked, with a maximum of four working weeks per leave year.

Sick days - The law in Ireland mandates the right for workers to receive 5 days of sick pay per year from the first day of sickness, providing a medical certificate is presented by the 4th day of sickness. As of January 1, 2025, employees in Ireland are entitled to 7 days of statutory sick pay per year, provided they submit a medical certificate by the 4th day of illness. The sick pay is set at 70% of normal earnings, capped at €110 per day. As of January 1, 2025, employees in Ireland are entitled to 7 days of statutory sick pay per year, provided they submit a medical certificate by the 4th day of illness. The sick pay is set at 70% of normal earnings, capped at €110 per day.

Maternity leave - Mothers are entitled to 26 weeks (156 days) of maternity leave and can take an additional 16 weeks of unpaid leave, starting immediately after maternity leave ends. They must take at least two weeks before the expected birth and a minimum of four weeks afterwards. Paid leave entitlement depends on the worker’s social insurance contributions (PRSI), as employers are not required to provide payment during this period.

Parents' leave - Parents’ leave entitles each parent to 9 weeks of leave (for children born on or after August 1st, 2024) during the first two years of a child’s life, including in cases of adoption. The leave duration remains the same for multiple births, such as twins. The benefit is provided by the authorities, contingent on the employee meeting the necessary PRSI contribution requirements. The benefit amounts to up to €274 per week and is administered by the Department of Social Protection, not the employer.

Bereavement leave - it is common for employees to be entitled to three days of paid leave in the event of the death of an immediate family member; however, this is typically a contractual agreement rather than a statutory entitlement.

Jury service leave - Employers are required to provide full-time, regularly employed staff with job-protected, unpaid leave for their duty as jurors or as witnesses, or if they are acting as a plaintiff or defendant in court. Employees must present a copy of the jury summons to their employer as proof of their obligation. The court will provide a specified payment, and the employer may choose to offer additional compensation.

Unemployment Insurance

If you lose your job, are made redundant, laid off, or if your working hours are reduced, you may qualify for a social welfare payment, either Jobseeker’s allowance or Jobseeker’s benefit. When you apply for a jobseeker’s payment, you declare that you are available for work, fit for work, looking for work, but can't find work.

To get Jobseeker’s benefit (JB), you must have enough social insurance (PRSI) contributions. JB rates are graduated according to earnings. If you are affected by this, it may be of greater benefit for you to claim Jobseeker's Allowance.

To get Jobseeker’s allowance (JA), you must pass a means test. A means test is a process where your income is calculated to determine if it falls below a certain level. If it falls below a certain level, you can get Jobseeker’s Allowance.

Disability allowance (DA) is a weekly allowance paid to people with a disability. You can get DA from the age of 16. You can get disability allowance even if you are in school.

• Mandatory benefits: Pension scheme, social security benefits
• Common perks: private health insurance plans, gym memberships, mental health support

Leave policies: Annual leave, maternity and paternity leave, sick leave, domestic violence leave, force majeure leave, jury service leave

In Ireland, employers are responsible for withholding income tax (PAYE), social insurance (PRSI), and the Universal Social Charge (USC) from employees’ wages.

Personal income tax rate: Income up to €44,000 — 20%; Income above €44,000 is taxed at the higher rate of 40%.

VAT: 23%

Tax allowances: Personal tax credits and reliefs such as the Single Person Credit and Married Couple Credit

Additional tax reliefs: Medical expenses and pension contributions.

In Ireland, employers are required to pay salaries according to the terms outlined in individual employment contracts or collective agreements. These salaries must not be less than the national minimum wage set by the government.

The monetary unit in Ireland is the Euro, often represented by the € symbol or abbreviated as EUR.

Ceiling fee for contributions:

Social security PRSI rate is 4.00%

Employee rate: 4.00% (applies to most employees)

Employer rate: 8.80% – 11.05%, depending on employee earnings

Universal social charge (USC) - The previous 4% USC band has been reduced to 3%, and the income range has been expanded slightly to benefit middle-income earners:

0 - 12,012 EUR: 0.5%

12,013 - 27,382 EUR: 2%

27,383 - 70,044 EUR and above: 3%

Over 70,045 EUR: 8%

In Ireland, the typical working week runs from Monday to Friday, with a maximum average of 48 hours allowed over a four-month period. Employees are entitled to 24 consecutive hours of rest within any seven-day period.

The 13th-month pay is not compulsory in Ireland, meaning employers are not required to provide this additional salary.

Salaries are typically paid during the last week of each month, aligning with standard payroll practices. This structure helps maintain clarity and consistency in compensation for employees throughout their employment.

Salary payment deadline: No single statutory deadline

Taxes and contributions payments deadline: By the 23rd day of the following month if submitted online, or by the 14th if filed on paper.

Payroll declarations deadline: Same as taxes and contributions

Payroll currency: EUR

Employment law in Ireland is shaped by common law, statutes, and the Irish Constitution. The Constitution guarantees key rights, such as equality, freedom of association, and the right to earn a living. The Employment Equality Acts 1998–2015 further prohibit discrimination in areas such as hiring, promotion, and training based on factors like gender, age, race, and disability.

Total employment cost:

• Pay Related Social Insurance (PRSI) contributions: 8.8% to 11.05% depending on the employee’s earnings

Minimum wage: €13.50 per hour

Probation period: Up to six months

Using EOR services in Ireland lets you employ individuals legally without setting up a local entity. The EOR becomes the legal employer and takes care of:

• Legal employment and contracts
• Payroll processing
• Tax withholding
• Benefits administration
• Onboarding/offboarding employees

Using PEO services in Ireland offers HR and administrative support while you remain the legal employer. It’s ideal for businesses with a local entity that need help managing day-to-day workforce operations, including:

• HR support and workforce administration
• Payroll and benefits management
• Compliance and local labour law guidance
• Employment contracts assistance

Native Teams offers a payroll calculator tailored to Ireland’s labour laws. It helps you quickly estimate net and gross salaries, mandatory deductions, and both employer and employee contributions.