Payroll in Ireland

Ireland employers are required to pay employees monthly. The standard pay date is the last working day of each month.

Most Irish companies process payroll between the 25th and 31st of each month, with payments hitting employee accounts by the final business day. You'll need to factor in bank processing times - typically 1-2 business days for standard transfers.

Payment frequency options

While monthly is standard, you can pay employees more frequently if needed. Weekly and bi-weekly payments are legally acceptable but create additional administrative burden for tax reporting.

Weekly payments: Due every Friday Bi-weekly payments: Typically every second Friday Monthly payments: Last working day of the month (most common)

13th month payments

Ireland doesn't require 13th month payments, but some companies offer Christmas bonuses as part of their benefits package. These are purely discretionary and subject to standard income tax and PRSI contributions.

If you do provide Christmas bonuses, they're typically paid in December and must be included in your year-end tax reporting to Revenue.

## How is vacation pay calculated?

Vacation pay in Ireland follows the 20% rule - employees earn 1.67 days of annual leave for each month worked, totaling 20 days per year for full-time employees.

Vacation pay calculation

Annual-leave pay is normally paid in advance at the normal weekly rate. Statutory leave continues to accrue during certified sickness.

Example calculation:

• Full-time five-day week: usually 20 days a year
• Part-time: calculated with the applicable hours-worked methods, capped at four working weeks

When vacation pay is due

You must pay vacation leave within one month of the employee taking the leave. Many employers pay vacation at the normal payroll cycle, treating it as regular wages.

Employees can't waive their right to paid annual leave - you must provide both the time off and the payment.

## What payment methods are required?

Irish law requires you to pay wages in legal tender - which includes bank transfers, the most common method. Cash payments are allowed but impractical for most employers due to security and record-keeping requirements.

Bank transfer requirements

Electronic transfers are standard and preferred by Revenue for audit trails. You'll need each employee's:

• Bank account number
• Sort code (6 digits)
• Account holder name (must match employment records)

International employees can use Irish bank accounts or EU SEPA-compatible accounts. Transfers to non-EU accounts may incur additional fees and currency conversion costs.

Payment timing requirements

Wages must be paid at least once per month and no later than one month after the pay period ends. Most companies pay monthly to align with tax and PRSI reporting cycles.

Late payment can result in employee complaints to the Workplace Relations Commission and potential compensation orders.

## What must payslips include?

Irish payslips must contain 14 mandatory elements under the Payment of Wages Act. Missing any element can result in compliance issues during inspections.

Detailed deduction breakdown

Your payslips must show:

Tax deductions:

• Income tax (PAYE) - exact amount and rate applied
• USC (Universal Social Charge) - amount and rate
• PRSI contributions - employee portion only

Other deductions:

• Pension contributions
• Health insurance premiums
• Union dues
• Any court-ordered deductions

Language and delivery requirements

Payslips must be in English or Irish (Gaeilge). Electronic payslips are legally acceptable if employees can access and print them easily.

You must provide payslips within one week of payment. Keep copies for at least three years - Revenue can request them during audits.

Employees have the right to request paper copies even if you normally provide electronic versions. You can't charge fees for providing mandatory payslip information.

Before your first payroll run in Ireland, you'll need two key tax registrations: PAYE (Pay As You Earn) for income tax withholding and PRSI (Pay Related Social Insurance) for social insurance contributions.

The good news? Both registrations happen through Revenue's single ROS (Revenue Online Service) system. You'll get your employer registration number within 10 working days of submitting your application.

What are Ireland's income tax rates?

Ireland uses a dual-rate system with two main tax bands for 2026. The rates remain unchanged from 2025, but the standard rate band has increased.

Annual Income (€)	Monthly Income (€)	Tax Rate
€0 - €44,000	€0 - €3,666.67	20%
€44,001+	€3,666.68+	40%

Single taxpayers get the full €44,000 standard rate band. Married couples can transfer unused portions between spouses, potentially doubling the amount taxed at 20%.

Don't forget the Universal Social Charge (USC). This additional tax applies to gross income over €13,000 annually:

Annual Income (€)	USC Rate
€0 - €12,012	0.5%
€12,012 - €28,700	2%
€28,700 - €70,044	3%
Over €70,044	8%

How does tax withholding work?

You're responsible for calculating and withholding income tax, USC, and PRSI from every payroll. Employees receive a Revenue Payroll Notification (RPN) that tells you their tax credits and rate bands.

The RPN system updates in real-time. Check for updates before each pay run through ROS or your payroll software's API connection.

Monthly P30 returns must be filed by the 23rd of the following month. This return shows total tax withheld and includes your payment to Revenue. Late filing triggers a penalty.

Payroll is reported to Revenue on or before each payday, so there is no separate annual P35 return.

What about non-resident employees?

Non-resident employees working in Ireland face the same tax rates but with different allowances. They can't claim the standard personal tax credit unless they meet specific conditions.

Key rule: If someone works in Ireland for more than 30 days in a tax year, you must operate PAYE regardless of their residence status.

Tax treaty benefits may apply for employees from countries with double taxation agreements. Common treaties include the US, UK, and most EU countries. However, you still withhold Irish tax initially - employees claim treaty benefits through year-end returns.

Are there local or regional taxes?

No local income taxes apply in Ireland. All income tax goes to the national Revenue Commissioners.

However, Local Property Tax (LPT) may affect some employees if you provide housing benefits. This isn't withheld through payroll but creates a taxable benefit calculation.

The tax year runs from January 1st to December 31st, making year-end processing straightforward compared to countries with split tax years.

The biggest employer cost in Ireland? PRSI (social security) at 11.25% (11.40% from 1 October 2026) for ordinary Class A employees, and it already includes the National Training Fund levy. Add the MyFutureFund pension contribution where it applies, and you're looking at roughly 12.75% on top of every salary.

Contribution breakdown

Contribution Type	Employer Rate	Employee Rate	Notes
PRSI Class A (weekly pay over €552)	11.25%, 11.40% from 1 Oct 2026	4.2%	No cap; includes the National Training Fund levy
PRSI Class A (weekly pay €38-€552)	9.00%, 9.15% from 1 Oct 2026	Varies	Lower employer rate band
MyFutureFund auto-enrolment	1.5% (2026-2028)	1.5% (2026-2028)	Plus 0.5% State contribution

Total employer cost example

For a €60,000 salary in 2026, at the rate in force until 30 September:

• Base salary: €60,000
• PRSI (11.25%): €6,750
• MyFutureFund (1.5%, if enrolled): €900
• Total employer cost: €67,650
• Cost multiplier: 1.13 (about 13% more than base salary)

Contribution caps and ceilings

PRSI has no cap - you'll pay the full Class A rate on every euro of salary once weekly pay exceeds €552, no matter how much your employees earn.

Registration requirements

You'll need to register with Revenue for PAYE/PRSI within 30 days of hiring your first employee. The process takes 5-10 business days.

Payment deadlines

Monthly payments are due by the 23rd of the following month. If the 23rd falls on a weekend, payments are due the previous Friday.

There is no annual P35 return: payroll is reported to Revenue on or before each payday.

Pension auto-enrolment (MyFutureFund) began in January 2026. Contributions are collected through payroll under NAERSA notifications, at 1.5% each from employee and employer for 2026-2028, rising in later phases.

Maternity leave in Ireland is 26 weeks, plus 16 additional unpaid weeks. Here's how it affects your payroll.

PRSI-based Maternity Benefit is paid by the Department of Social Protection, separately from the right to leave. The employer has no statutory duty to pay salary; any top-up is a contractual choice. Coordinate these payments carefully to avoid overpaying employees.

Annual leave

Every employee gets a minimum of 20 days annual leave per year. That's four working weeks for full-time staff. Part-time employees get pro-rated entitlement based on their working hours.

Vacation pay calculation is straightforward - pay employees their normal weekly wage. If their hours vary, calculate the average over the previous 13 weeks.

Carryover and payout rules

Employees can carry over unused leave, but only with your agreement. There's no legal requirement to allow carryover beyond the leave year.

When someone leaves, you must pay out all unused annual leave. Calculate this at their normal rate of pay. Don't forget to include this in their final payslip and P45.

Sick leave

Employees with 13 weeks' continuous service get five certified sick days per calendar year, paid by the employer at 70% of usual daily earnings up to €110 a day. This affects your payroll directly.

After those five days, employees may qualify for PRSI-based Illness Benefit from the Department of Social Protection.

Certification requirements

No medical cert needed for the first day. For days 2-7, employees can self-certify. You need a medical certificate for absences over seven consecutive days.

Track sick leave carefully in your payroll system. The three-day entitlement resets each calendar year, not on the employee's anniversary date.

Parental leave

Maternity leave

26 weeks total leave. You pay the first two weeks at full salary - this is mandatory employer-paid leave.

The 26 weeks are covered by Maternity Benefit from social protection, subject to PRSI conditions. Your payroll system needs to handle the transition smoothly. Many employers choose to top up the social protection payment to maintain full salary.

Paternity leave

Two consecutive weeks of paternity leave within 26 weeks of the birth or adoption placement. State Paternity Benefit depends on PRSI conditions; full salary is not an automatic employer obligation.

Parent's leave

Up to 26 weeks of unpaid parental leave per child under age 12, plus nine weeks of Parent's Leave in the first two years. This doesn't affect payroll calculations directly, but you need to track it for compliance and benefits continuation.

Public holidays 2026

Date	Holiday	Notes
January 1	New Year's Day	Wednesday
March 17	St. Patrick's Day	Tuesday
April 13	Easter Monday	Monday
May 4	May Day	Monday
June 1	June Holiday	Monday
August 3	August Holiday	Monday
October 26	October Holiday	Monday
December 25	Christmas Day	Friday
December 26	St. Stephen's Day	Saturday

When a public holiday falls on a weekend, there's no automatic substitute day. However, many employers give the following Monday off as company policy.

Holiday pay is straightforward - pay the employee's normal daily wage. For employees with varying hours, calculate the average daily pay over the previous 13 weeks.

Mandatory benefits affecting payroll

Employer PRSI

You pay 11.25% (11.40% from 1 October 2026) PRSI on all earnings once weekly pay exceeds €552. This funds social protection benefits including maternity benefit, illness benefit, and pensions.

Pension auto-enrolment

Since January 2026, employees aged 23 to under 60 earning at least €20,000 a year and not in a qualifying scheme are automatically enrolled in MyFutureFund. Employee contributions start at 1.5% with an employer match.

The contribution rates increase gradually:

• 2026-2028: 1.5% employee, 1.5% employer, plus 0.5% from the State
• Later phases: scheduled increases

Optional but common benefits

Private health insurance is popular but not mandatory. If you provide it, the benefit-in-kind value is taxable through payroll.

Bike-to-work scheme allows tax-free loans up to €1,500 for bicycles. Deduct repayments from gross pay before calculating tax and PRSI.

Travel passes for public transport are tax-free up to €1,500 per year when provided by the employer.

Ireland requires you to keep payroll records for six years. Lose them and face unlimited fines plus potential criminal charges for directors.

Monthly filing requirements

You must file Form P30 by the 23rd of each month following the pay period. This covers PAYE, PRSI, and USC deductions from the previous month's payroll.

Submit through Revenue Online Service (ROS) - paper filings aren't accepted anymore. The system locks you out after the deadline, so there's no grace period.

Late filing attracts penalties from Revenue.

You'll also need to make payment by the same 23rd deadline. Revenue charges interest on late payments.

Annual reporting

There is no Form P35 reconciliation: each payroll submission made during 2026 already reports year-to-date details to Revenue.

There are no P60s: employees see their annual Employment Detail Summary in Revenue's myAccount, built from your payday submissions.

P45s go to departing employees immediately when they leave - not at year-end. Include all pay and deductions from January 1st to their leaving date.

Revenue audits focus on businesses with inconsistent filings, high staff turnover, or industry risk factors like construction and hospitality.

Employee documentation

Employment contracts must include specific details required under the Terms of Employment (Information) Acts. You have five days to provide written terms after employment starts.

Required contract elements:

• Full names and addresses of both parties
• Place of work and normal working hours
• Job title and brief description
• Start date and contract duration
• Pay rate, method, and frequency
• Holiday entitlement and public holiday arrangements

Payslips must show gross pay, all deductions with separate amounts for PAYE, PRSI, and USC, plus net pay. Issue these on or before pay day - electronic payslips are fine if employees can access them.

Store all employment records for six years after the employee leaves. This includes contracts, payslips, timesheets, and correspondence about pay or conditions.

Penalties and violations

Penalties apply for late filing, late payment and incorrect withholding. They are set by Revenue and the Workplace Relations Commission, so check the current schedule on its website before relying on a figure.

Repeated late filing is treated more seriously by Revenue.

Regulatory bodies

Revenue Commissioners handle all payroll tax compliance. Their PAYE/PRSI Enquiries section deals with employer questions and audits.

• Phone: 01 738 36 36 (Monday-Friday, 9:30am-1pm, 2pm-4:30pm)
• Online: revenue.ie and Revenue Online Service (ROS)
• Address: Dublin Castle, Dublin 2

Workplace Relations Commission (WRC) enforces employment law, including contract requirements and working time rules.

• Phone: 059 917 8990
• Online: workplacerelations.ie
• Address: O'Brien Road, Carlow

Register for ROS immediately when you start payroll operations. You'll need your tax number and can't file returns without ROS access. The registration process takes 5-10 working days.

Revenue's MyEnquiries service through ROS lets you ask specific questions about your payroll obligations. Responses typically come within five working days and create an audit trail of your compliance efforts.