Payroll Services in Ireland

Mercans is your trusted partner for premium payroll outsourcing in Ireland. Our dedication to providing outstanding payroll services in Ireland is unwavering. With extensive experience in the payroll industry, Mercans guarantees precise and compliant payroll services in Ireland, making us the top choice for businesses of any size. Rely on Mercans for timely and accurate payroll processing, along with the convenience of multi-currency payments in the Irish market. As your local payroll expert in Ireland, we have a team of in-country payroll specialists with thorough knowledge of local laws, ensuring a seamless payroll experience tailored to your business requirements.

Everything you need to know before running payroll in Ireland

Working Hours and Overtime

In Ireland, employees typically have a maximum average working week of 48 hours, calculated over a four-month period. However, this average can be extended to six months for seasonal or high-activity roles, or even 12 months for employees under a collective agreement approved by the Labour Court. These adjustments help balance working hours based on specific job requirements and organizational needs.

Overtime refers to any work performed beyond an employee’s standard working hours, as defined by their employment contract. The regulation of working hours and breaks is outlined in the Organisation of Working Time Act 1997, which mandates that employers keep detailed records of employees’ working hours, as specified in the Organisation of Working Time (Records) (Prescribed Form and Exemptions) Regulations 2001. However, there is no legal obligation for employers to pay for overtime or establish statutory rates for extra hours worked.

Minimum Wages

The National Minimum Wage (NMW) sets the minimum hourly pay rate for most employees, including full-time, part-time, temporary, casual, and seasonal workers. Certain groups are exempt, such as close relatives of sole traders (e.g., spouse, parent, child) and craft apprentices under specific training acts.

From January 1, 2024, the National Minimum Wage rates are:

Minimum pay rates for other sectors are specified in Sectoral Employment Orders and Employment Regulation Orders.

13th Month Salary

There is no legal requirement to provide a 13th or 14th month’s salary.

Payroll Cycle

Employers in Ireland are required to process payrolls on a weekly or monthly basis according to payroll regulations. Employees are supposed to be paid by the end of every month. 13th salaries are not subject to payroll rules.

Payroll Requirements

Under the Payment of Wages Act, 1991, every employee is entitled to receive a pay slip. This document must detail the gross wage and itemize all deductions. It serves as a written record from the employer, showing the total earnings before taxes and listing all deductions. Pay slips can be issued either electronically or as a printed copy.

Company Formation in Ireland

Setting up a company in Ireland is straightforward, thanks to a streamlined registration process. Here’s a simplified guide to get you started:

• Select Your Business Structure: Most Irish companies are established as private limited companies. Choose the business form that best suits your needs.
• Choose a Trading Name: Pick a unique trading name that stands out and is not already in use by another company in Ireland.
• Reserve Your Name: Complete an electronic name reservation with the Companies Registration Office (CRO) to ensure your chosen name is approved.
• Prepare Statutory Documents: Draft the necessary documents, including the articles of association, memorandum, constitution, or partnership agreement, depending on your company type.
• Notarize Bylaws: Sign and notarize your company’s bylaws in the presence of a public notary in Ireland.
• Open a Bank Account: Set up a corporate bank account with a local commercial bank, which will require several company documents.
• Register with the CRO: Submit all required documents and forms to the Companies Registration Office to officially register your company.

Mercans is here to guide you through each step, ensuring a smooth and efficient company formation process in Ireland.

Payroll Compliance in Ireland

Government Requirements in Ireland

Payroll Compliance

In Ireland, payroll compliance includes:

• Income Tax and PAYE: The PAYE system requires employers to withhold income tax from employee wages. PAYE rates are 20% or 40% depending on earnings. Additionally, employees’ earnings are subject to Pay Related Social Insurance (PRSI), typically 4% for employees and 11.05% for employers, and Universal Social Charge (USC) with rates between 0.5% and 8% depending on income and personal circumstances.
• Revenue Payroll Notification (RPN): Employers use the RPN provided by Revenue to determine the correct amount of PAYE, PRSI, and USC to deduct. The RPN includes tax credits, cut-off points, and previous deductions. It is crucial for employers to use the most current RPN to ensure accurate payroll calculations.
• Payroll Submissions: Employers must report payroll details to the Revenue Commissioners before employee payments are made. This includes the total pay, and the amounts of PAYE, USC, PRSI, and Local Property Tax (if applicable). Employers receive a monthly statement from Revenue, which must be reviewed and accepted or amended by the 14th of the following month. Payments are due by the 23rd of the following month for ROS users, or by the 14th otherwise.

Pension Compliance

• Types of Pension Schemes: The main pension schemes in Ireland are Company Pension Schemes, Personal Retirement Savings Accounts (PRSAs), and Personal Pension Plans. All pension schemes require Revenue approval for tax benefits. Employers are not obligated to provide a pension scheme but must offer access to a standard PRSA if no company pension scheme is in place.
• Contributions: Employers who provide a pension scheme must ensure contributions are deducted from payroll and paid to the pension provider by the 21st of the following month. Employers must notify employees monthly of the total contributions deducted and paid to the pension trustees.

Mercans helps ensure compliance with these requirements, streamlining your payroll and pension processes to meet Irish regulations effectively.

Payroll Taxes in Ireland

Social Security Contributions in Ireland

Pay-Related Social Insurance (PRSI)

PRSI is a mandatory contribution on employment income, including taxable non-cash benefits. Employees earning less than EUR 352 per week are exempt from PRSI for that week. PRSI also applies to income from trades, professions, or investments, with a minimum contribution of EUR 500, payable with preliminary tax by 31 October each year. Self-employed individuals with an annual income below EUR 5,000 are not liable for PRSI. The standard PRSI rate for self-employed persons is 4%, consistent with the rate for employees.

From 1 October 2024, PRSI rates will increase by 0.1% for both employers and employees. The updated rates are as follows:

Earnings until 30 September 2024:

• Class A1 (most employed persons): Employer: 11.05%, Employee: 4%
• Class S1 (proprietary and non-executive directors not insurable under Class A): Employer: 0%, Employee: 4%

Earnings from 1 October 2024:

• Class A1 (most employed persons): Employer: 11.15%, Employee: 4.1%
• Class S1 (proprietary and non-executive directors not insurable under Class A): Employer: 0%, Employee: 4.1%

Note: Self-employed individuals with income below EUR 5,000 annually are exempt from PRSI. Employee PRSI also applies to share-based remuneration and is collected through the PAYE system.

Universal Social Charge (USC)

The USC is a tax on gross income before pension deductions, with rates varying based on income and age. For individuals under 70, the USC rates for 2024 are:

• Income up to EUR 13,000 per annum: 0%
• Income up to EUR 12,012 per annum: 0.5%
• Income between EUR 12,012.01 and EUR 25,760 per annum: 2.0%
• Income between EUR 25,760.01 and EUR 70,044 per annum: 4.0%
• Income over EUR 70,044 per annum: 8.0%
• Income over EUR 100,000 (self-assessed): 11.0% (inclusive of a 3% surcharge)

For individuals aged 70 or over, or those with a medical card and an income of EUR 60,000 or less, the USC rates are:

• Income up to EUR 13,000 per annum: 0%
• On the first EUR 12,012 per annum: 0.5%
• Income over EUR 12,012 per annum: 2.0%

Department of Employment Affairs and Social Protection payments and income subjected to Deposit Interest Retention Tax (DIRT) are exempt from USC.

For expert guidance on managing social security contributions and ensuring compliance, trust Mercans. Contact us today to streamline your payroll processes and stay updated with the latest regulatory changes.

Personal Income Tax in Ireland

In Ireland, income tax applies based on residency and domicile status:

• Residents and Domiciled: Individuals who are both resident and domiciled in Ireland are taxed on their worldwide income.
• Residents but Not Domiciled: Those who are resident but not domiciled in Ireland are taxed on income from Irish sources, foreign employment income earned in Ireland, and foreign income that is remitted into Ireland.
• Non-Residents: Generally, non-residents are taxed only on income derived from Irish sources.

Personal Income Tax Rates for 2024

The income tax rates for individuals are as follows:

• Single and Widowed Persons (without dependents):
  • 20% Tax: Applies to income up to EUR 42,000
  • 40% Tax: Applies to income exceeding EUR 42,000
• Married Couples (one income):
  • 20% Tax: Applies to income up to EUR 51,000
  • 40% Tax: Applies to income exceeding EUR 51,000
• Married Couples (two incomes):
  • 20% Tax: Applies to income up to EUR 84,000
  • 40% Tax: Applies to income exceeding EUR 84,000

Exemption Limits

For individuals aged 65 or over, income tax exemptions apply if their income is below certain thresholds:

• Single/Widowed Individuals: Exemption limit is EUR 18,000
• Married Couples: Exemption limit is EUR 36,000

These limits are increased for individuals with dependent children. Marginal relief may be available if total income exceeds these specified limits.

Employee Benefits in Ireland

Mandatory Employee Benefits in Ireland

PRSA Facility

In Ireland, employers must offer access to a Personal Retirement Savings Account (PRSA) to employees who are not provided with an occupational pension scheme within six months of their start date. Although employers are not required to contribute to the PRSA, they must arrange the facility and enable employees to benefit from tax relief through payroll.

Statutory Sick Pay Scheme

Starting 1 January 2024, employees are entitled to five days of sick pay annually, up from three days in 2023. Sick pay must be provided at 70% of normal earnings, with a maximum daily amount of €110. This entitlement will rise to seven days in 2025 and ten days from 2026 onwards.

Supplementary Employee Benefits in Ireland

Group Life Assurance / Death-in-Service Schemes

Employers often provide group life assurance due to its cost-effectiveness and the significant protection it offers employees’ financial dependents in case of death. Typically, coverage amounts to about four times the employee’s base salary. These schemes are managed under trust and can deliver benefits quickly, bypassing probate.

Group Income Protection

Group income protection, while less common due to higher costs, is essential for employees who are long-term ill or disabled. Coverage usually amounts to 75% of salary, including state disability benefits, and can extend up to retirement age. Premiums for this insurance are tax-free for employees, though claim payments are taxable as income.

Group Medical & Dental Insurance

Private medical insurance remains a popular benefit when subsidized or fully covered by employers. Employer-paid premiums are taxed as a Benefit-In-Kind. The insurance typically covers a broad range of services, including in-patient care, consultations, and routine medical needs. While dental insurance is less common, it is gaining traction, especially among domestic companies. Dental premiums are also subject to Benefit-In-Kind taxation. Wellness programs provided through these schemes can support overall employee health.

Occupational Pensions / Group PRSA / Master Trust Pensions

For employers who provide pension contributions, the typical rate is around 6%, with employees contributing 5%. Pension options include occupational schemes, group PRSAs, and individual pensions under master trusts. Additional voluntary contributions can be made by employees up to revenue age-related limits.

Pension Auto-Enrolment

Draft legislation aims to establish a national auto-enrolment scheme for employees not currently included in a pension plan. Further details on the implementation of this scheme are pending.

Offering these benefits can significantly enhance employee attraction and retention. For personalized assistance in crafting an optimal benefits package, reach out to Mercans. We can help align your employee benefits with your strategic goals and ensure compliance with all requirements.

Benefits of Payroll Outsourcing in Ireland

• Navigating Complex Labor Laws: Outsourcing payroll services in Ireland guarantees meticulous compliance with intricate labor laws and regulations. Our experienced professionals expertly manage these complexities, reducing the risk of errors or penalties and ensuring peace of mind for businesses.
• Enhanced Scalability and Flexibility: Payroll outsourcing provides unparalleled scalability and flexibility to accommodate the evolving needs of businesses in Ireland. Whether expanding your workforce or adapting to regulatory changes, outsourcing partners adjust their services seamlessly to meet these demands.
• Access to Advanced Technologies and Expertise: By leveraging cutting-edge software solutions, our payroll outsourcing services streamline processes, enhance data security, and improve efficiency. Our professionals possess in-depth knowledge of tax regulations, deductions, and reporting requirements, ensuring accurate and timely payroll management.
• Cost Savings and Competitive Pricing: Outsourcing payroll leads to substantial cost savings by eliminating the need for in-house staff training and management. Providers offer competitive pricing models tailored to your business’s needs, optimizing cost-effectiveness while maintaining high-quality service.
• Supporting Business Growth: Outsourcing payroll services allows businesses in Ireland to focus on core objectives while benefiting from accurate, compliant, and cost-effective payroll management. With specialized expertise and advanced technologies, we support the growth and success of your business.
• Emphasizing High Safety Standards: Our payroll services prioritize the highest safety standards, incorporating industry-leading security measures to protect sensitive data. We adhere to stringent information security protocols, including ISO 27001 and ISAE3402 certifications.
• Ensuring Adequate and Sustainable Performance: We are committed to delivering consistent and sustainable performance that meets the dynamic demands of payroll services in Ireland.
• Flexibility and Scalability Tailored to Your Needs: Our services offer flexibility and scalability to adapt to changing business environments and evolving client needs in Ireland.
• Utilizing Collaborative Cloud Tools: Our collaborative cloud-based platform enhances efficiency and accessibility, facilitating seamless communication and collaboration across teams. We are dedicated to maintaining the highest standards of information security and operational integrity through our robust certifications.

For tailored payroll solutions and expert guidance in Ireland, connect with Mercans. We are here to ensure your payroll operations are compliant, efficient, and scalable, supporting your business’s growth and success.

Payroll Solutions in Ireland

Optimize Payroll Management in Ireland with Mercans’ Comprehensive Solutions

Transform your payroll processes with Mercans’ innovative global solutions tailored for Ireland. Our adaptable models ensure local compliance, support multi-currency transactions, and seamlessly integrate with HCM and ERP systems for precise and timely payments.

Discover Our Flexible Solutions

• SaaS (Software as a Service): Perfect for large enterprises managing payroll across multiple jurisdictions with complex needs. Our SaaS solution enhances operational efficiency and streamlines payroll management.
• Managed Services: Designed for mid-sized and large companies handling multi-country payroll. We provide on-demand HR expertise, ensuring security, reliability, and compliance.
• HRMS (Human Resource Management System): Ideal for growing mid to large businesses, our HRMS offers a comprehensive suite of features, including payroll and benefits management, with customizable options for tailored solutions.

Partner with Mercans to elevate your payroll operations in Ireland. Our solutions are designed to maximize efficiency, ensure compliance, and support your business’s growth.

Streamline Payroll with Mercans’ Technology and Integrations

• Technology: Explore the forefront of innovation with Mercans’ cutting-edge technology that powers our global payroll solutions. Learn more about our technological prowess here
• Integrations: Seamlessly integrate your Human Capital Management (HCM) systems with Mercans’ solutions, enhancing efficiency and connectivity. Discover the power of integration here
• Recognitions: Join a partner recognized for excellence. Mercans has earned accolades for its commitment to delivering exceptional payroll services. Explore our awards and recognitions here

Outsource to Payroll Company in Ireland

In Ireland’s dynamic business environment, Mercans is your premier choice for navigating local complexities. With our strong focus on compliance, extensive understanding of labor laws, and comprehensive range of services, we are your ideal partner for achieving business success. Rely on Mercans to ensure smooth operations, adherence to regulations, and sustainable growth across Ireland.