Ireland payroll and benefits guide
What global businesses need to know about payroll in Ireland
Did you know that at just 12.5%, Ireland has the lowest rate of corporation tax of any country in Western Europe? Many key decision-makers in multinational businesses certainly did—it’s one of the main reasons why the likes of Google, IBM, Facebook, Twitter, Microsoft, Vodafone, Oracle, and Amazon have substantial offices in and around the capital, Dublin.
This has helped make Ireland, with its population of just over five million, a very strong economy for a country of its size—its GDP per capita figure is the highest of any country in the world with a population of over one million. This has had a huge impact on business, finance and society in Ireland—wages are becoming higher and higher all the time, with employees in Dublin in particular needing to cover housing costs that have spiraled upwards rapidly.
There have been a number of reforms to employment law and payroll in Ireland in recent years, including an overhaul of the minimum wage, increased requirements for gender pay gap reporting, and a new auto-enrolment pension scheme. These changes, and all the other key facts you need to know, are covered in this guide to running payroll in Ireland.
Getting Started
Businesses looking to get started in Ireland must register their business name within 30 days at the Companies Registration Office (CRO) and pay the filing fee—this is either €40 if done through a paper form, or €20 if completed online using the CORE (Companies Online Registration Environment) platform. Registering the company itself is a further €50 and must be done online.
Requirements for registration vary between countries inside and outside the European Economic Area (EEA), although the filing fee remains the same in either case. For example,
most incoming businesses will register as private limited companies, but these must have at least one director who is a resident of the European Economic Area (which, notably, does not include the United Kingdom). If this isn’t possible, then the company has to purchase a bond of €25,000 (approx. £21,200; $28,300) as a form of compliance insurance.
If registering as a limited company, you will be required to pay/remit Corporation Tax, Income Tax, PRSI social security and the Universal Social Charge (more information on these later in this guide).
Employment Considerations in Ireland
Employment law in Ireland is detailed and precise, and so it’s useful to gain at least a working knowledge of it before you start hiring. Good places to start include the Workplace Relations Commission, the Irish Business and Employers Confederation (IBEC), the Irish Small and Medium Enterprises Association (ISME), and the Small Firms Association. Additionally, the Department of Employment Affairs and Social Protection maintains several Intreo offices, which offer employment and income support, and provide a range of useful services for employers.
Employers must provide full written terms and conditions of employment within two months of an employee’s start date. Additionally, Ireland has also recently expanded legal requirements around gender pay gap reporting. By November 2025, all organizations with a workforce of at least 50 are now required to publish detailed online reports regarding their gender pay gap across a range of measurements.
The standard working week in Ireland is 39 hours, and employees should not work more than 48 hours a week (averaged over a four month period). Unusually for a European country, there is no statutory requirement for overtime pay, and this is entirely up for negotiation through employment contracts and collective bargaining. Most employers will offer higher rates of pay for overtime, especially on Sundays, which are still considered days of rest in Ireland. Indeed, work-life balance is valued very highly in Ireland, and so working late nights or weekends to complete tasks that can wait until the following business day is uncommon.
Probation periods can run anywhere between three and 12 months in length, although three months is more common. Notice periods start at one week after three months’ service, rising to two weeks after two years, four weeks after five years, six weeks after ten years and eight weeks after 15 years. Payment can be made as an alternative to notice.
Compensation and Severance
Ireland’s national minimum wage has increased a number of times in recent years. These increases have been made in preparation for the phasing out of the national minimum wage in 2026. It will be replaced with a ‘living wage’ which would be set at 60% of the median wage of all workers in Ireland.
For 2025, the minimum wage rate is €12.70 an hour (approx. £11.40; $15.30) for employees aged 20 or over; lower rates apply for 19-year-olds, 18-year-olds and under-18s respectively. Expect further increases to be implemented at the start of 2026.
The payment of discretionary bonuses is common in Ireland, but there is no requirement to pay a 13th-month salary.
Severance pay is applicable to employees made redundant with at least two years’ service. They receive two weeks’ pay per year of service, plus one extra week’s pay—however, each ‘week’ of pay is subject to a minimum level of €600 (approx. £510; $680)
Tax & Withholding Considerations
Income tax is deducted by employers directly from employees’ salaries through the Pay As You Earn (PAYE) system, which employees can access online through the Revenue website. Ireland has now implemented real-time reporting of pay and taxes via the Employer Submission Mechanism, meaning employers now have to submit the approved payroll file to Revenue before employees can be paid.
There are two tax bands, 20% and 40%, although as in the United States, the threshold between these two bands varies, depending on relationship/marital status. As of 2025, the 40% threshold kicks in for a single or widowed person without children at €44,000 (approx. £37,300; $49,800). For a married couple with one household income, the threshold is €53,000 (approx. £44,900; $60,000), and for a two-income married couple it’s €88,000 (approx. £74,600; $99,700).
The amount of tax relief an employee is entitled to is defined by Ireland’s comprehensive tax credit system, which gives annually updated rates of relief for varying statuses of age, personal life and disability.
There are two main types of social security contributions in Ireland. The first is Pay-Related Social Insurance (PRSI). At the time of writing, employers contribute 11.15% of salary and employees contribute 4.1%, although these rates will increase to 11.25% and 4.2% respectively on October 1st 2025. The second type is the Universal Social Charge, which is levied at a progressive scale. Rates of contribution vary between 0.5% for the first €12,012 (approx. £10,200; $13,600) of annual salary, up to 8% on earnings above €70,044 (approx. £59,400; $79,300). People who earn less than €352 per week (approx. £300; $400) are not required to pay either type of contribution.
Most Irish residents can access healthcare for free, or for a small fee, although many employers choose to offer subsidized health insurance schemes so that employees may cover themselves for private care. The Irish state retirement age for pension purposes is currently 66, after which they can receive state pension if they have made sufficient social security contributions.
On January 1st 2026, Ireland will introduce a new retirement savings scheme called My Future Fund, which will work along similar lines to the Workplace Pension scheme in the United Kingdom. Employees will automatically be enrolled if they are between 23 and 60, earn more than €20,000 a year, and don’t currently have a pension plan. Initial contributions will be 1.5% each by employers and employees, while the Irish government will top up the fund by the value of one-third of employee contributions made. Over the next decade, contribution levels will eventually reach 6% for employers and employees.
Ireland’s standard VAT rate is very high at 23%, but its corporation tax rate of 12.5% is very low by European standards.
Holiday and Leave Considerations in Ireland
Ireland has ten public holidays each year (the majority of which are Mondays) in which most businesses are closed, while Good Friday is also similarly observed by most businesses. Days off in lieu or extra day’s pay are often given for fixed-date holidays like Christmas that fall on weekends, although this is not compulsory. It’s also important to bear in mind that Sunday is still widely considered a day of rest in Ireland, especially outside Dublin and other major cities. Many shops and fuel stations still close on Sundays, although restaurants and pubs generally open.
Paid leave entitlement is four weeks (20 working days) per year for full-time employees, although employers can offer more in employment contracts. Part-time workers accrue paid leave at a rate of 8% of their hours worked.
Ireland introduced a new system for statutory sick pay in 2023. As of 2025, the entitlement was seven days per year, but this will rise to ten days in 2026. Employers pay their employees 70% of their normal rate for medically certified illness, up to a maximum of €110 per day (approx. £95; $125).
Pregnant women and new mothers can take up to 26 weeks of paid maternity leave and receive €262 (approx. £220; $295) a week; this must include the two weeks immediately before the due date and the four weeks after it. They can also take a further 16 unpaid weeks after the end of their paid maternity leave if they so wish. In the event of a mother dying shortly after the birth, maternity leave can be transferred to the father. Paternity leave entitlement in Ireland, for fathers or non-birthing partners, is two weeks. Both maternity and paternity pay are covered in their entirety by the social security system, as long as the relevant parties have made sufficient contributions beforehand.
On top of this, Irish social security also provides paid parent’s leave during the first two years of a child’s life. Each parent qualifies for this leave: the entitlement has been increased from seven weeks to nine weeks for parents of children born on or after August 1 2024. The rate of pay is €289 per week (approx. £245; $325), and some employers choose to make their own additional contribution to ‘top up’ this amount.
Payroll in Ireland: A summary
The last couple of years have seen many changes to Ireland’s payroll and employment requirements, with more lined up in 2026. Staying on the right side of compliance is important, but can be difficult if your organization has to do so in several different countries simultaneously. This is where working with a global payroll partner, and tapping into all their up-to-date, country-specific expertise, can be a real help.
This article is for informational purposes only and not intended to convey or constitute legal or any other advice. It is not a substitute for advice from a qualified professional.
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