Ireland payroll and tax overview.

Foreign Direct Investment in Ireland

The Irish government welcomes inward investment with a variety of investment incentives to attract foreign multinational corporations to Ireland. Foreign and local investors are treated equally and are both eligible for investment incentives.

Registrations and Establishing an Entity in Ireland

A company is required to have a legal entity established to process a payroll. Employers must complete a TR2 form to register a company for all taxes in Ireland. The same reference number is used for PAYE, VAT, etc.

Penalties for late submission and payment of tax and social security depend on the amount outstanding and how overdue the payments are.

Business Banking in Ireland

It is not mandatory to make payments to employees from an in-country bank account.

Working Week in Ireland

The working week in Ireland is typically Monday to Friday. The working day for commercial offices is usually 8 hours, typically from 8:30am to 5pm.

Basic Facts about Ireland

Population: 4.83 million (Eurostat, 2018)

Capital: Dublin

Main language: English

Major Religion: Christianity

Monetary unit: Euro

Main exports: Machinery and equipment, chemicals, foodstuffs

GNI per capita: US $76,110 (World Bank, 2021)

Internet domain: .ie

International dialling code: +353

The Tax Year runs from 1st January to 31st December in Ireland.

Income Levy was replaced in 2011 by Universal Social Charge (USC).

The Income Levy was replaced in 2011 by Universal Social Charge (USC) and is a tax on employee income and Benefit in Kind (BIK). USC is payable on an employee’s gross income before any tax reliefs, pension contributions, or PRSI. Social insurance payments, such as maternity and paternity benefit, is exempt from the USC.

Incomes of €13,000.00 or less are exempt from USC. Once an employee’s income exceeds this, the relevant rates must be paid on all income.

Medical cardholders and those aged 70 and over whose total income does not exceed €60,000 will pay the reduced rates as follows:

• The first €12,012.00 at 0.5%
• Over €12,012.01 at 2%

Income Tax in Ireland

Employers should deduct income tax directly from an employee’s wages on behalf of Revenue which is known as Pay As You Earn (PAYE). Income tax is dependent on an employee’s income and personal circumstances. A standard rate tax band applies an initial tax rate to an employee’s income up to a certain amount, with remaining income above this band being taxed at a higher secondary rate.

Social Security in Ireland

Employers should deduct social insurance contributions directly from an employee’s wages on behalf of Revenue which is known as Pay Related Social Insurance (PRSI). Employee PRSI contributions must be noted on an employee’s payslip.

PRSI is dependent on an employee’s social insurance class. Class A employees are classed as individuals who are employed under a contract of service with reckonable pay of €38 or more per week in industrial, commercial, and service-type employment.

Employers must also pay PRSI contributions for employees which are collected by Revenue. Record of employer and employee PRSI contributions must be kept by the employer and the Department of Social Protection.

Reporting Tax in Ireland

As of 1 January 2019, forms P45, P46, P30, P35, and P60 were abolished with the introduction of real-time reporting.

New Employees in Ireland

Employers must register new employees with Revenue by submitting a new Revenue Payroll Notification (RPN) request through the Revenue Online Service (ROS). Requests should be submitted before an employee’s payment date. Employees will be on Emergency tax, which is 40% of all earnings until the RPN is available.

Leavers in Ireland

Employers need to enter the leavers’ leaving date and details of final pay and deductions into Revenue’s online system. The leaver will then be able to log in and view their pay and tax details.