Payroll in Ireland

Payroll cycle in Ireland

Employee salaries are typically paid on a weekly or monthly basis. Employers in Ireland must ensure that employees are paid by the last day of the month.

Payroll taxes, on the other hand, consist of various deductions that employers are required to withhold and remit on behalf of their employees. These include:

• Income Tax: Employees are subject to income tax, which is calculated based on their income, including bonuses and benefits.
• Universal Social Charge (USC): The USC is a tax on income that funds social welfare benefits, healthcare, and free education. Most types of income, including salaries and self-employment earnings, are subject to this tax.
• Pay-Related Social Insurance (PRSI): PRSI contributions go towards funding social welfare benefits such as pensions, illness, and maternity benefits. Both employees and employers in Ireland are required to make PRSI contributions.

13th salary in Ireland

Unlike in some other countries, there are no specific legal provisions in Ireland regarding 13th salaries. This means that employers are not obligated by law to provide an additional month’s salary, commonly referred to as a 13th salary. However, businesses may choose to offer bonuses or additional pay during certain periods as part of their incentive or reward programs.

How to do payroll in Ireland

When you opt to manage payroll in-house, here are the processes you need to keep in mind

1. Register as an employer. Before running your payroll operations, you must register your business with the Revenue Commissioners and obtain an employer tax registration number (ERN) to ensure compliance with tax and social welfare requirements.
2. Collect employee information. Gather employees’ Personal Public Service (PPS) numbers. For individuals in Ireland, PPS is a unique reference number to access social welfare benefits, public services, and information. Collect their tax registration details, and banking information if necessary.
3. Accurately calculate gross pay. Determine an employee’s gross pay, including regular wages, overtime, bonuses, and other forms of compensation. Keep in mind that underpayment could lead to penalties for non-compliance.
4. Deduct taxes and PRSI. Withhold income tax, USC, and PRSI contributions from employees’ wages, following applicable rates and thresholds.
5. Process Payroll. Use a robust payroll system to help you avoid costly mistakes. Accurately calculate net pay, taxes, and deductions in compliance with laws and regulations.

Don’t forget the necessary taxes and returns. You need to file them on time with the Revenue Commissioners to remain compliant.

Outsourcing payroll in Ireland

Given the complexities of managing payroll, more and more companies in Ireland are opting to outsource payroll. Some companies in Ireland are entrusting their payroll responsibilities to a reliable third-party global payroll provider, like CXC, to streamline their operations and ensure compliance.

Here are some of the factors you need to consider when evaluating your options for outsourcing payroll.

• Data security. Choose a payroll provider with robust data security measures and standards to protect sensitive payroll information and ensure compliance with data protection regulations.
• Flexibility. Look for a payroll provider that can provide tailored services to accommodate specific requirements, including managing complex payroll structures and running payroll in multiple countries.
• Customer support. A trusted payroll provider must provide good customer service to help you address concerns or issues promptly.
• Reputation and experience. Select a payroll provider with a solid track record, positive client reviews, and extensive experience in managing payroll in Ireland.

At CXC, we have a proven track record supporting business with their global workforce management needs. With 32 years of industry experience, we have a deep understanding of the intricacies involved in managing payroll for companies across various industries.