A Guide to Payroll in Ireland

Do you want to hire employees for your business? Are you a business owner in Ireland? Then, you are in the right place to know about payroll! Before hiring employees, you need to register yourself as an employer. Also, Sole Traders aren’t paid but can still hire to work for them.

Are you a Limited Company owner in Ireland? Then, you can pay yourself a salary, but ensure that you register your company as an employer. Is it the same as paying yourself as a business owner and employee? It is not the same!

Different factors and business models can affect how you get paid as a business owner. Are you looking to know more about Irish payroll? Here, we will look at the payroll in Ireland for a clear understanding. Further, learn more about how to pay your employees in Ireland!

Understanding Payroll in Ireland

If hiring employees for your business, you must add them to the payroll. As a business owner, payroll is vital; hence, you must know how it works. The best payroll software in Ireland is an effective way to handle payroll.

Employees in Ireland have to pay taxes on salaries using the PAYE tax system.

When paying their employees, companies must determine income tax, PRSI, and USC. You have to pay this deduction to the government on behalf of employees. Payroll software can integrate with accounting software, providing real-time PAYE information.

What will be the first step in hiring an employee in Ireland? Registering with “Revenue” is a key!

As a business owner, you can't hire people or pay them until you register as an employer. Registering you as an employer with Revenue is the first step for hiring. You must register whether you are a partnership, a sole trader, or a limited company.

You can register with Revenue in two ways. You can use Revenue Online Services (ROS) or paper-based applications.

After registering, you must send the details to Revenue when you process payroll. By the middle of the next month, you must pay income tax, PRSI, and USC that fell due on that payroll run.

Within five days of payroll submission, Revenue will issue a statement of liability. You can find this information in your Revenue Online Service account. Also, you will get the information to the business address in a letter. Based on your payroll, you can see how much PAYE you owe for the month.

You should accept your liability statement and pay the amount due to Revenue. Employers must file and pay their PAYE tax forms online every month by the 23rd of the following month. You should submit paper forms and pay for them by the 14th of the month.

If you don’t file your PAYE reports on time, you could have fines or charges for late payments.

Employee in Ireland: What Do You Need to Know?

First, you need to know what an employee means in Ireland. Any Irish business owner should know about this when thinking of payroll. The crucial part is the difference between a contract of services vs. a contract for services.

Even though they sound the same, this is the primary factor in deciding:

  • Legal protection and benefits.
  • Self-employed.
  • Included in your payroll run.

Let’s have a detailed look at this to get a clear picture:

Contract of Service Contract for Service
Employees Self-employed/ Independent contractors
Covered by employment laws Not covered by employee laws
Example: Hiring an in-house employee Example: Hiring an outsourcing provider

An Overview of Irish Payroll Regulations

An Overview of Irish Payroll Regulations

RPN or Revenue Payroll Notification

Businesses receive details about the correct tax credits and employee deductions through RPN. RPN is something that almost all payroll systems do as part of the payroll process. You can get RPN through Revenue’s Online System if you don’t have a payroll system. If you can't get the appropriate RPN, add the emergency tax to the employee’s salary.

Universal Social Change or USC

As of 2021, employers must take USC in employee’s pay. The USC rates change based on how much you pay your employee.

Pay Related Social Insurance or PRSI

The main goal of PRSI is to contribute to welfare benefits. How much PRSI you pay depends on the employee's salary. There are two parts to a PRSI contribution:

  • Employers' PRSI is what a company pays added to the PAYE tax they must pay.
  • Employee PRSI is what a company takes from an employee's pay for the government.

Income Tax or IT

How much income tax employees must pay depends on how they get paid. Different criteria apply to the employee’s situation, whether single or married. Employees can use tax credits to lower the income tax before calculation. It is up to the employee to make sure that the proper tax credits are applied.

Revenue notifies companies about an employee’s tax credits. Every employee has unique personal situations that change their income tax rate. Also, knowing and meeting the due dates can help you escape the penalty for filing your tax return late.

Local Property Tax or LPT

Are you an employee who has a property in Ireland? You can choose to pay your LPT. Revenue will then notify the employee how much LPT to take from their monthly pay.

What Should You Consider When Doing Payroll Processing in Ireland?

  • Employee contracts detailing salary, work hours, etc.
  • Taxation such as PAYE, USC, PRSI, etc.
  • National minimum wage or industry-specific salary rates.
  • Enrolling in an eligible workplace pension scheme.
  • Holiday entitlements.
  • Compliance with employment equality legislation.
  • Maintaining accurate records of employees.
  • File payroll tax returns with the Revenue.
  • Proper account of employee payroll benefits in Ireland, allowances, and more.
  • Compliance with GDPR.

Payroll Management for Startups in Ireland

Should you outsource or do payroll in-house? Know more about the benefits of outsourcing payroll than doing in-house in Ireland.

Here is How Payroll Outsourcing Companies in Ireland Can Benefit You:

  • Ensure that your payroll follows all the latest laws the Revenue sets.
  • Hiring experts to handle your payroll can save you time, allowing you to focus on crucial aspects.
  • Ensure the proper payment for your employees at the right time.
  • Error-free payroll processing.
  • Reducing costly mistakes.
  • Data security with strict control mechanisms.

Outbooks- Trusted Payroll Services in Ireland

Are you ready to stop worrying about payroll? Handling small business payroll is vital, but it requires a lot of effort. Hiring an expert will be a wise choice in the long run.

Are you a business owner looking for reliable outsourcing payroll services in Ireland? Your search ends with Outbooks!

Our seasoned experts will provide you with tailored solutions based on your needs. We keep up with the changing Ireland payroll tax rates to ensure you follow all the laws.

Choose Outbooks for all your payroll needs in Ireland. Talk to our experts to learn more!

Reach out to us at info@outbooks.com  or +44 330 057 8597 today!

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