Ireland’s business environment is shaped by innovation and growth, making it an attractive place to build your team. Ireland payroll, however, comes with several layers of compliance — from tax and social insurance to real-time reporting. Having the right payroll services in Ireland keeps you compliant and avoids fines.

How to set up payroll in Ireland

Using payroll services in Ireland helps you comply with local regulations. But before you can hire and pay your team members, you need a legal presence in the country, which usually means setting up a subsidiary in Ireland. 

Once your entity is established, you’ll need to meet several requirements before running payroll. This includes registering each team member with Irish Revenue’s pay-as-you-earn (PAYE) system, as well as managing pay-related social insurance (PRSI) and the universal social charge (USC).

Employers must inform employees about any occupational pension schemes. If there aren’t any, or if employees aren’t eligible to join within six months of starting a job, employers must give them access to a personal retirement savings account (PRSA) and make payroll deductions. Employers don’t contribute to the PRSA. 

From 2026, mandatory employer and employee pension contributions also apply based on the auto-enrollment (AE) retirement savings system. This is a retirement savings scheme for employees who don’t have a workplace pension scheme or an extra pension set up.

Once registered with Revenue, social security, and relevant pension schemes, employers must get specific information from each employee to process payroll, including:

  • Full legal name, address, and date of birth 

  • Personal public service (PPS) number 

  • Employment start date, job title, or position

  • Employment type (full time, part time, fixed term, or temporary)

  • Pay frequency, gross salary, allowances or benefits, and deductions

  • Overtime or other variable pay

  • Revenue payroll notification (RPN) details

  • Irish bank account details

  • Occupational pension scheme, PRSA, or AE details

  • Leave entitlements

An easier alternative is to partner with an employer of record (EOR) like G-P. We handle payroll with 99% accuracy, so your team is always paid on time. With us, you don’t have to set up a local entity or worry about payroll admin. We ensure full compliance with all payroll and employment obligations.

Payroll taxes and social security in Ireland

Managing Ireland payroll means withholding income tax deductions and social security contributions from employee salaries, as well as complying with other regulations. 

Ireland personal income tax (PAYE)

Ireland uses a progressive PAYE income tax system. There are two tax rates:

  • Standard rate: 20%

  • Higher rate: 40%

The standard rate cut-off point for a single individual in 2026 is EUR 44,000. Income above this is taxed at 40%. For married couples or civil partners, the cut-off is higher.

Tax credits, such as the personal tax credit (EUR 2,000) and employee tax credit (EUR 2,000) reduce the total tax paid. 

Ireland social security contributions

Employers and employees make PRSI contributions. These fund a range of social welfare benefits, such as the state pension, unemployment benefits, maternity, paternity, and parental benefits, and illness and disability benefits. Employees earning EUR 352 or less per week don’t pay PRSI.

For most employees, the rates are:

  • Employee PRSI: 4.2% on all earnings (increasing to 4.35% from October 1, 2026)

  • Employer PRSI: 9% on weekly earnings up to EUR 552, and 11.25% on earnings above EUR 552 (increasing to 9.15% and 11.4% respectively from October 1, 2026) 

The USC is a general tax on an employee's total income. It funds public services, such as health, education, infrastructure, and other government spending. Those earning EUR 13,000 or less per year don’t pay the USC. The 2026 rates are:

  • 0.5% on the first EUR 12,012

  • 2% on the next EUR 16,688 (up to EUR 28,700) 

  • 3% on the next EUR 41,344 (up to EUR 70,044) 

  • 8% on the balance above EUR 70,044 

Other Ireland payroll taxes and deductions

In addition to PAYE (income tax), PRSI (social security), and USC (Universal Social Charge), here are other common payroll-related obligations and deductions that businesses in Ireland should be aware of:

  1. Automatic enrollment retirement savings system (AE):

    • Starting in 2026, eligible employees (aged 23–60, earning over EUR 20,000/year, and not already in a pension scheme) will be automatically enrolled in a new retirement savings plan.

    • Both employers and employees will make contributions, starting at 1.5% and rising to 6% over ten years, with a State top-up.

    • Employers must facilitate payroll deductions and make matching contributions.

  2. Attachment of earnings orders (AEOs):

    • Employers may be required by court order to deduct amounts from an employee’s pay for maintenance (e.g., child or spousal support) or debt recovery.

    • These aren’t taxes, but they’re mandatory payroll deductions when ordered.

  3. Benefits-in-kind (BIK):

    • Non-cash benefits (such as company cars or private health insurance) are treated as taxable income.

    • Employers must calculate, report, and deduct the appropriate taxes on these benefits through payroll.

Elements of payroll administration in Ireland

  • Payment frequency: Payroll services in Ireland are typically processed on a weekly or monthly basis.

  • 13th- and 14th-month salary: There are no statutory requirements for 13th- or 14th- month salary in Ireland.

  • Payslip requirements: The Payment of Wages Act 1991 mandates that employers provide a detailed payslip to each employee with every payment. The payslip must show gross pay and all deductions, both statutory — such as PAYE, PRSI, and USC — and non-statutory — such as pension contributions or union fees. 

  • Reporting and deadlines: Under the PAYE modernization system, employers must report payroll information to Revenue in real time. This means a payroll submission request (PSR) must be sent on or before each pay day. 

Ireland payroll options for companies

Companies have several choices for managing their Ireland payroll:

  • Internal payroll: A company with a registered subsidiary in Ireland and a large HR team can manage payroll internally. This approach requires hiring staff with expertise in local labor and tax law and is often best suited for large organizations with a long-term commitment to the country.

  • Partner with an EOR: Working with an EOR like G-P is the most efficient and secure option. As the EOR, G-P handles all payroll, tax, and compliance obligations, allowing you to focus on growing your business.

  • G-P Contractor™: Although independent contractors aren’t part of payroll, some companies rely on this worker type for specialized projects. With G-P Contractor, you can hire and pay contractors in 190 countries and your choice of currency, using a digital wallet, bank transfer, or virtual card.

Paying independent contractors in Ireland

Independent contractors in Ireland are  responsible for registering for self-assessment with Revenue and paying their own PAYE, USC, and PRSI. Businesses shouldn’t deduct PAYE, PRSI, or USC from payments made to independent contractors, except in sectors like construction, forestry, and meat processing, where relevant contracts tax (RCT) applies. 

If an independent contractor's turnover is more than the annual VAT threshold, which is EUR 75,000 for goods and EUR 37,500 for services, they must register for and charge VAT on their invoices.

Ireland entitlement and termination terms

When an employment contract is terminated in Ireland, several final payment and administrative steps must be completed:

  • Final wages and entitlements: Employees must get payment for all work completed, any unused statutory annual leave, and any contractual entitlements, such as bonuses or commissions.

  • Payment in lieu of notice (PILON): A PILON is mandatory if the employee doesn’t  work their full notice period and the employment contract allows it or if mutually agreed upon.

  • Statutory redundancy pay: Employees with at least 104 weeks of service may be eligible for statutory redundancy pay, calculated as two weeks' pay per year of service plus a bonus week, capped at EUR 600 per week.

  • Processing of final pay: Final pay should be processed in the payroll cycle immediately following the termination date.

  • Administrative requirements: Employers must issue a detailed final payslip and notify the Irish Revenue Commissioners of the employee's departure.

Navigating payroll and termination compliance in Ireland

Noncompliance with Irish payroll and termination has major risks. Understanding the deadlines for claims and specific procedures for collective redundancies is essential for effective risk management.

  • Risk of Workplace Relations Commission (WRC) claims: Failure to adhere to Ireland's payroll and termination regulations can lead to claims filed with the WRC, potentially resulting in fines and compensation orders.

  • Time limit for employee claims: Employees generally have a six-month window to bring claims regarding pay or entitlements.

  • Extension for claims: This claim period may be extended up to 12 months for cases involving reasonable cause.

  • Collective redundancy procedures: Specific consultation and notification procedures are mandatory in situations involving collective redundancies.

Let G-P manage your Ireland payroll

G-P is the #1 rated EOR by all top industry analysts. We manage the entire employee lifecycle, including payroll, for your teams in 180+ countries. Get on-time,error-free payroll with flexible payment options and easily add bonuses, commissions, and exceptions in just a few clicks. 

G-P EOR is the preferred partner for leading HCM, PEO, and payroll platforms. Bring your workforce data together in one place to maintain existing workflows while guaranteeing consistent and accurate data across your integrated systems.

Book a demo to learn more about our global employment products and EOR solutions in Ireland.