Hiring in Ireland means taking on a clear set of tax and payroll obligations from day one. You’ll need to register with Revenue, run payroll through the PAYE system, pay employer PRSI on top of each employee’s salary, and now contribute to Ireland’s new mandatory pension scheme. This guide covers every obligation you’re responsible for as an employer, with the current 2026 rates so you can budget accurately before you make your first hire.
Employer prsi contributions
Employer PRSI is your direct contribution to Ireland’s social insurance system. The rate you pay depends on how much your employee earns each week, and there’s a mid-year rate increase coming in October 2026 that you’ll want to plan for.
Standard rates
Ireland uses a two-rate structure for employer PRSI under Class A, which covers most employees in private sector employment. From January 1 to September 30, 2026, you pay 9% on weekly earnings up to €552, and 11.25% on weekly earnings above €552. These rates apply to each employee individually based on their weekly pay.
The october 2026 increase
From October 1, 2026, both rates rise slightly. You’ll pay 9.15% on weekly earnings up to €552 and 11.40% on weekly earnings above €552. The increase is modest, but if you’re hiring multiple employees, it’s worth updating your payroll projections before the fourth quarter.
The €552 threshold
The €552 weekly earnings threshold is the point at which the higher employer PRSI rate kicks in. An employee earning exactly €552 per week sits in the lower band. An employee earning €553 per week falls into the higher band for the full amount. There’s no split calculation: the rate applies to all of that week’s earnings based on which side of the threshold the employee falls.
Auto-enrolment from january 2026
Ireland launched mandatory pension auto-enrolment on January 1, 2026. If you have eligible employees, you’re now required to contribute to their pension savings on top of paying employer PRSI.
Under the scheme, you contribute 1.5% of each eligible employee’s gross salary, matching the employee’s own contribution at the same rate. This is the initial contribution rate, and it will increase in stages over time as the scheme matures. Eligibility covers employees between 23 and 60 years old who earn above a minimum threshold and aren’t already enrolled in an occupational pension scheme. You can’t opt out of auto-enrolment on behalf of your employees, so if you’re setting up Irish payroll for the first time in 2026, factor the 1.5% employer contribution into your total cost of employment from the start.
Employee deductions you’re responsible for withholding
As an Irish employer, you don’t just pay your own contributions. You’re also responsible for calculating and withholding three separate deductions from your employees’ pay and remitting them to Revenue on their behalf. Revenue operates this through the PAYE system.
Income tax
Ireland uses a two-rate income tax system. Employees pay 20% on income up to the standard rate cut-off point, and 40% on income above it. For a single person in 2026, that cut-off is €44,000 per year. Employees who are married or in a civil partnership have a higher cut-off, and it varies based on their circumstances. You apply the correct rate based on each employee’s Tax Credit Certificate, which Revenue issues directly to you through the PAYE system.
Usc
The Universal Social Charge (USC) is a separate levy that applies to most employees. In 2026, the rates are:
- 0.5% on the first €12,012 of annual income
- 2% on income from €12,012.01 to €28,700
- 3% on income from €28,700.01 to €70,044
- 8% on income above €70,044
Employees with annual income below €13,000 are exempt from USC entirely. For those who are liable, USC applies on top of income tax, so your payroll software needs to calculate both correctly before remitting to Revenue.
Employee prsi
In addition to your own employer PRSI contribution, you withhold employee PRSI from each paycheck. The employee rate is 4.2% from January through September 2026, rising to 4.35% from October 1, 2026. Employees earning €352 or less per week are exempt from PRSI. You collect the employee’s contribution and remit it to Revenue along with your own employer contribution each month.
Minimum wage obligations
Ireland’s national minimum wage applies to all employees and varies by age. From January 1, 2026, the rates are:
- Aged 20 and over: €14.15 per hour
- Aged 19: €12.74 per hour
- Aged 18: €11.32 per hour
- Under 18: €9.91 per hour
You’re required to pay at least these rates to every eligible employee. Many employers in skilled roles will pay above these floors, but they remain the legal baseline. If you’re hiring remote workers in Ireland and paying in a currency other than euros, you’ll need to ensure the converted rate meets the minimum at the time of payment.
Registering as an employer with revenue
Before you can run your first payroll in Ireland, you need to register as an employer with Revenue. You do this through Revenue’s Online Service (ROS). Registration gives you access to the PAYE Modernisation system, which is how you submit payroll data and pay what you owe.
Under PAYE Modernisation, you report payroll in real time. Each time you pay an employee, you submit a Payroll Submission Request (PSR) to Revenue on or before the payment date. Monthly PAYE payments are typically due around the 23rd of the following month if paying online through ROS. Payroll in Ireland is most commonly run monthly, with employees paid around the 27th of each month.
You’ll also need to have each employee’s Personal Public Service (PPS) number before their first payroll run. Revenue uses this to link the employee’s Tax Credit Certificate to your employer registration. Without it, you’ll be required to apply emergency tax rates, which are significantly higher and create unnecessary complications for your new hire.
Hiring in ireland through an Employer of Record
If your company doesn’t have a legal entity in Ireland, you can’t run Irish payroll directly. Hiring employees there requires a registered Irish employer. One way to do that without incorporating locally is to use an Employer of Record (EOR).
An EOR becomes the legal employer of your Irish hires on paper, handling registration with Revenue, running PAYE payroll, paying employer PRSI, making auto-enrolment contributions, and ensuring compliance with Irish employment law. Your team members work for your business in practice, but the EOR handles every administrative and legal obligation that would otherwise require a local entity.
This approach works well for companies testing the Irish market, hiring a small number of employees without the overhead of setting up a subsidiary, or moving quickly on a key hire. If you’re evaluating providers, look at what’s included in the service scope. The best EOR services cover payroll, tax filing, benefits administration, and local legal compliance in a single package.
Book a demo to see how RemotePass handles Irish payroll and tax compliance.
Frequently asked questions
What is the employer prsi rate in ireland in 2026?
From January 1 to September 30, 2026, you pay 9% on weekly employee earnings up to €552 and 11.25% on earnings above €552. From October 1, 2026, those rates rise to 9.15% and 11.40% respectively.
Is auto-enrolment mandatory for all irish employers?
Yes. Ireland’s pension auto-enrolment scheme launched on January 1, 2026, and requires employers to contribute 1.5% of gross salary for eligible employees. Eligibility is based on the employee’s age, earnings, and whether they already have an occupational pension. You can’t opt employees out on your own.
Do you need an irish entity to hire employees in ireland?
You need a registered Irish employer to run PAYE payroll and comply with local employment law. If you don’t have an Irish entity, the most common alternative is using an Employer of Record, which employs your staff locally on your behalf.
What happens if you apply the wrong tax rate to an irish employee?
If you apply the wrong PAYE rate or withhold the wrong amount of USC or PRSI, Revenue can issue a correction and you may be liable for the shortfall plus interest. Under PAYE Modernisation, errors are visible in real time, so it’s important to have your payroll software correctly configured before your first payroll run. Using accurate Tax Credit Certificates from Revenue for each employee is the main way to avoid miscalculations.
