Taxes and payrolls: the labour market in Ireland
Each labour market has some peculiarities. It may be tricky for foreigners to understand fully the payment methods, the taxes and other benefits related. In TalentUp we are starting a series of different blog articles, one for each country. This article analyses the labour market in Ireland.
General data about the Irish labour market
| Minimum wage | Hourly wage rates are based on age as follows: Aged 20+: 11.30 EURAged 19: 10.17 EURAged 18: 9.04 EURAged under 18: 7.91 EUR |
| Payment basis | Weekly or monthly |
| Payment | Must be paid by the last day of the month |
| Maximum working hours a week | 39h |
| Maximum overtime hours a week | 9h |
Payroll taxes in Ireland
Social security contributions are made by the employer and the employee and are used for funding unemployment, pension, maternity/paternity leave, and sickness or injury.
| Contingencies | Employer % | Employee % |
| Social Security (PRSI) (Reduced to 8.80% where earnings are below the threshold of 441 EUR) | 8.80% – 11.05% | 4.00% |
| Universal Social Charge (USC) | 0.50-11.00% | |
| Total | 8.80% – 11.05% | 4.50-15.00% |
Once contributions are paid, employees need to pay an income tax that varies depending on their gross salaries.
| Gross salary | Income tax |
| Up to 40,000€ if single or widowed with no children Up to 49,000€ if married couple with one household income Up to 80,000€ if married couple with two household incomes | 20.00% |
| Over that | 40.00% |
Contingencies from self-employees
As a self-employed person you pay income tax under the self-assessment system, once a year. Self-assessment means that you are responsible for making your own assessment of tax due.
Example of net salary in Ireland
As a reference, we use the average salary of a software engineer. In Ireland, on average, software engineers earn annually 50,300€.
| Employer | Employee | |||
| % | € | % | € | |
| Gross salary (annually) | ||||
| Social Security (PRSI) | 11.05% | 5,558.15 | 4.00% | 2,012 |
| Universal Social Charge (USC) | 11.00% | 5,533 | ||
| Total | 11.05% | 5,558.15 | 15.00% | 7,545 |
| Income tax | 20.00% | 8,551 | ||
| Net salary (annually) | 34,204€ |
The employer contributes 7,545€ to social security and the employee 5,558.15€.
After paying the income tax, the employee has a net salary of 34,204€ coming from a gross salary of 50,300€.
Unemployment regulation in Ireland
Notice should be made by both an employee and employer as follows:
| Time worked | Notice period |
| From 13 weeks to 2 years | 1 week |
| From 2 to 5 years | 2 weeks |
| From 5 to 10 years | 4 weeks |
| From 10 to 15 years | 6 weeks |
| More than 15 years | 8 weeks |
Payment can be made in lieu of notice.
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.
Probation period goes from 3 months to 1 year.
Different kinds of leaves in Ireland
The minimum number of vacation days is 20. Part-time workers’ entitlement is calculated as 8.00% of the hours worked, subject to a maximum of four working weeks per leave year.
The are 9 public holidays in Ireland.
The workers have the right to receive 3 days of sick pay per year. It is 70% of normal pay, paid by the employer and with a maximum of 110€ daily. By 2026, they will be entitled to 10 days of sick pay per year.
There are also three days of paid bereavement 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.
Paid parental 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 weekly standard rate of maternity benefit is is 262€.
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. it is paid by PRSI.
Parents are entitled to up to 26 weeks of unpaid parental leave for each eligible child before 12 years old.
Other common Irish benefits
| Benefit | % of companies with this benefit |
| Work-Life Balance | 15.8 |
| Cutting Edge technology | 13,1 |
| Professional Development | 12.3 |
| Flexible Working Hours | 9.6 |
| Health Insurance | 5.4 |
How to employ an Irish worker
Companies that want to hire in Ireland should have a legal entity there. I mean registering in the Companies Registration Office (CRO= and opening a business bank account. The next step is to sign up with Ireland’s Revenue Online Service where they’ll be required to register for taxes like VAT, Pay As You Earn (PAYE), and the Relevant Contracts Tax (RCT).
Some platforms (Papaya Global among them) offer the Employer of Record (EoR) service helping companies hire countries where they do not have any office.
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