Payroll and Benefits Guide Ireland
Last updated: May 09, 2023
Contributions
Employer
Employer Payroll Contributions
| 8.80% to 11.05% | Total Employment Cost |
| 8.80% – 11.05% | Social Security (PRSI) (Reduced to 8.80% where earnings are below the threshold of 441 EUR) |
Employee
Employee Payroll Contributions
| 4.50% to 15.00% | Total Employee Cost |
| 4.00% | Social Security PRSI |
| 0.50-11.00% | Universal Social Charge (USC) |
Employee
Employee Income Tax
Single or widowed, no children:
|
20.00% |
On income up to 40,000 EUR |
|
40.00% |
On income in excess of 40,000 EUR |
Married couple, one household income:
|
20.00% |
On income up to 49,000 EUR |
|
40.00% |
On income in excess of 49,000 EUR |
Married couple, two household incomes
|
20.00% |
On income up to 80,000 EUR |
|
40.00% |
On income in excess of 80,000 EUR |
Employer taxes
Employee taxes
Minimum Wage
General
Since 1 January 2023, the national minimum wage in Ireland is 11.30 EUR per hour. Wage rates are based on age as follows:
- Aged 20+: 11.30 EUR
- Aged 19: 10.17 EUR
- Aged 18: 9.04 EUR
- Aged under 18: 7.91 EUR
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
Salaries are paid either on a weekly or monthly basis. Employers should pay employees by the last day of the month.
13th Salary
There are no provisions in the law regarding 13th salaries.
Working Hours
General
A full-time work week is 39 hours. Employers are responsible for ensuring that employees are given adequate rest. The Organization of Working Time Act 1997 rules govern maximum working hours, daily and weekly rest breaks.
A work week cannot exceed 48 hours on average over four months. In addition, employees should get 24 consecutive hours of rest in any period of 7 days, and this should normally follow on from one of the 11-hour rest periods already mentioned. As an alternative, your employer can provide two 24-hour rest periods in a week if it follows a week in which you did not get any 24-hour rest periods. Unless your contract states otherwise, the 24-hour rest period should include a Sunday.
Overtime
Employers have no statutory obligation to pay overtime. Overtime pay is regulated by employment contract/collective agreements.
Many employers pay employees higher rates of pay for overtime as stipulated within the employment contract.
Specific sectors of employment have higher rates of pay for overtime than for regular hours. This is covered by employment regulation orders and registered employment agreements.
Working Week
Monday-Friday
Leave
Paid Time Off
An employee’s entitlement to annual leave or holidays from work is set out both in legislation and the employee’s employment contract.
The Organization of Working Time Act 1997 is responsible for providing the entitlement. The act provides a basic annual paid leave entitlement of four weeks (20 working days), although an employee’s contract can provide for a bigger amount. Part-time workers’ entitlement is calculated as 8.00% of the hours worked, subject to a maximum of four working weeks per leave year.
Public Holidays
There are 10 public holidays. Public holidays that fall on the weekend are usually moved to a weekday as a day off in lieu.
Sick Days
As of 1st January 2023, the law in Ireland now mandates the right for workers to receive 3 days of sick pay per year from the first day of sickness, providing a medical certificate is presented by the 4th day of sickness:
- Sick days can be taken consecutively or non-consecutive days.
- Sick pay is paid by the employer at 70% of normal pay, up to a maximum of €110 daily.
- To be eligible for this benefit the worker must be employed for at least 13 weeks before they can claim statutory sick pay.
- Companies can choose to offer more generous sick pay policy.
- This new entitlement is part of a wider 4-year phased sick pay legislation as follows:
- 2023 – 3 days sick pay entitlement
- 2024 – 5 days sick pay entitlement
- 2025 – 7 days sick pay entitlement
- 2026 – 10 days sick pay entitlement
Maternity Leave
Mothers are entitled to 26 (156 days) weeks of maternity leave and can receive an extra 16 weeks of unpaid leave, which begins immediately after the end of maternity leave. Mothers must take at least two weeks before the expected birth and at least four weeks after. The entitlement for paid leave depends on whether the worker has contributed enough social insurance (PRSI), as employers are not obligated to pay.
Eligibility for payment from the PRSI consists of one of the following options:
- At least 39 weeks of PRSI paid in the 12 months before the first day of the maternity leave
- At least 39 weeks of PRSI paid since first starting work and at least 39 weeks of PRSI paid or credited in the relevant tax year or the tax year immediately following the relevant tax year
- At least 26 weeks of PRSI paid in the relevant tax year and at least 26 weeks PRSI paid in the tax year immediately before the relevant tax year
The weekly standard rate of maternity benefit is is 262.00 EUR.
PAID MATERNITY LEAVE (DAYS)
Paternity Leave
Fathers are entitled to seven weeks of paternity leave that can start any time in the first six months after birth, or placement in the case of an adoption.
Relevant parents are the following:
- The father of the child
- The partner (spouse, civil partner, or cohabitant) of the mother of the child
- The parent of a donor-conceived child
The employer is not required to pay the employee during paternity leave, but the employee may qualify for paternity benefit during this time if they have contributed sufficient PRSI contributions.
Parental Leave
Parents are entitled to up to 26 weeks of unpaid parental leave for each eligible child before 12 years old. To qualify for the leave, the employee must have been employed for at least one year and provided the employer with a written parental leave request at least six weeks before the required start date.
Adoptive leave entitles one adoptive parent to up to 24 weeks’ unpaid leave from the date the child is placed in the employee’s care.
The Family Leave and Miscellaneous Provisions Bill 2021 has just passed all the stages of the Oireachtas; the new legislation will influence both Adoption and Parent’s leave in Ireland, is effective from April 2021, and will apply in relation to all children born since November 2019. This payment is available to both parents.
This new legislation will rectify the loophole in the Adoption Leave Act regarding adoption by male same-sex couples. It will also give adoptive parents more flexibility to decide which parent will avail of adoptive leave and benefit.
Effective from 1 July 2022, parent’s leave – which is available to anyone with a child under 2 years of age or who adopted a child within the last 2 years – has been extended from 5 to 7 weeks. The parent must complete the extra leave on or before their child’s second birthday or within 2 years of the adoption placement.
There is no service requirement to be eligible for parent’s leave and the associated benefit can be claimed by employees with the required level of social insurance (PRSI) contribution from the Department of Social Protection.
Other Leave
Depending on the collective agreement/employment contract terms, an employee may be allowed additional leave types once approved between the employer and employee for the following:
- Bereavement leave: It is common practice for an employee to be entitled to three days of paid leave in the event of the death of an immediate member of the family; however, this is a contractual agreement rather than a statutory leave entitlement.
- Jury service leave: Employers must provide their full-time, regularly employed employees with job-protected and unpaid leave for their duty as jurors or as a witness in a case or acting as a plaintiff or defendant in the courts. Employees must provide a copy of the jury summons to the employer as evidence of requirement. The court will provide a specific amount of payment, and the employer can choose to provide any additional payment.
Termination
Termination Process
Employers can terminate a fix-term contract by giving the following reasons – business, personal, or worker misconduct. It requires notice and a written explanation for the termination. If the cause is misconduct, a warning needs to be given with the employee provided a chance to explain his/her actions.
When employment ends, employees shall receive any money owed and a payslip.
Revenue Payroll Notifications (RFNs) are available in real-time for new employees (following the implementation of real-time information, the issuing of P45 & P46 forms are no longer required).
Notice Period
In accordance with the contract terms, the notice period is dependent on the length of employment.
Notice should be made by both an employee and employer as follows:
- 13 weeks-2 years: 1 week
- 2-5 years: 2 weeks
- 5-10 years: 4 weeks
- 10-15 years: 6 weeks
- 15+ years: 8 weeks
Payment can be made in lieu of notice.
Severance Pay
Severance is payable only to redundant employees with 2 years’ service at the rate of 2 weeks’ pay per year of service plus an additional week’s pay. Pay is capped at EUR 600 per week. More generous terms are possible and quite common.
Probation Period
The common probationary period to use is 3 to 11 months (it must not exceed 12 months).
Common Benefits
General
Wellness allowance, health allowance, and private pension employer contributions (5% of salary).
VISA
VISA
Non-residents of Ireland are classified into two primary groups, European nationals (EEA) and non-European nationals (Non- EEA).
EEA nationals can seek work without requiring a work permit, and non-EEA nationals must apply and pay for a work permit or green card. The permit is initially granted for two years.
Foreign workers in Ireland must have a valid work permit if their salaries exceed a certain threshold and are subject to Irish taxation on incomes earned in Ireland and abroad.
Further changes may come into force in 2021 following Brexit implementation.
Short Stay Visas
All applicants for a short stay ‘C’ visa (whether for a single entry or multiple entries) must show that they have a sufficiently strong family, social or economic ties to a place of residence in a country other than Ireland to assure the visa officer assessing the application that the projected stay in Ireland will be temporary and in accordance with the duration and conditions of the permission granted by the immigration authorities on arrival in Ireland.
Types of stay include Business, Conference or event, Tourist, and Internship.
The maximum stay allowed under a short stay ‘C’ visa is 90 days.
Long Stay Visas
Individuals wishing to travel to Ireland for more than three months, for example, to pursue a course of study, for work, or to settle permanently in Ireland with family members who are already residents in Ireland, can apply for a long stay ‘D’ visa for a single entry.
If they are granted a long stay ‘D’ visa and wish to remain in the country for longer than three months or beyond the period of leave given to them by an immigration officer at an Irish port of entry, they will be required to register and obtain a residence permit.
VAT
General
23.00% standard rate, with a second tier VAT for specific items of 13.5% and a temporary reduced rate of 9% VAT for the tourism and hospitality sector which has been extended to 31st August 2023. Alongside other specific tiers, third tier VAT rate of 9%, fourth tier VAT rate of 4.8% and fifth tier zero VAT rate.
Stay up to date on payroll & employment law changes
Version History
Sick Leave - Employees with at least 13 weeks’ continuous service are entitled to 3 days of sick pay per year.
Payroll contributions and personal income tax rates have been updated.
Paternity leave increased to 5 weeks. Will increase to 7 weeks in July.
New payroll contributions come into effect.
New personal income tax rates come into effect.
Questions & Answers
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Payroll and Benefits Guide
in Ireland
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Day | Date | Holiday | Notes |
|---|---|---|---|
| Sunday | Jan-1 | New Year's Day | |
| Monday | Jan-2 | New Year’s Holiday | Day Off in Lieu |
| Monday | Feb-6 | Bank Holiday | |
| Friday | Mar-17 | Saint Patrick's Day | |
| Monday | Apr-10 | Easter Monday | |
| Monday | May-1 | Early May Bank Holiday | |
| Monday | Jun-5 | June Bank Holiday | |
| Monday | Aug-7 | Summer Bank Holiday | |
| Monday | Oct-30 | October Bank Holiday | |
| Monday | Dec-25 | Christmas Day | |
| Tuesday | Dec-26 | St Stephen's Day |
Are there any legal alternatives I can offer my employees if a public holiday comes at a time of intense work?
Employees are entitled to 9 public holidays. Those days can be taken on the day of the holiday, as a paid day off in the month of the holiday, as an extra day of annual leave, or as an addition day’s pay.
What’s the usual on call rate if it is on bank holiday?
It can be agreed that work is done on a bank holiday if a different day off is given in lieu, or additional (double) pay can be given if no additional day is agreed.