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Ireland – Employer of Record

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Country Introduction – Ireland

Capital – Dublin
Currency – Euro
GDP – 504.2 billion USD (2021)
People/Nationality – Irish
Language – Irish and English
Major Religion – Christianity
Population – 5,071,688 (as of December 14, 2023)

Ireland has experienced significant economic growth over the past few decades. The country’s Gross Domestic Product (GDP) per capita is relatively high. Ireland is a major player in the technology sector, hosting the European headquarters of several multinational technology companies. Dublin has earned the nickname “Silicon Valley of Europe.”

Ireland’s economy is highly dependent on exports, and the country has developed a strong export-oriented strategy, taking advantage of its membership in the European Union and global trade opportunities. Agriculture and the agri-food sector have traditionally been significant contributors to the Irish economy. Ireland is known for its agricultural products and exports.

Dublin is a major financial hub, and the financial services sector plays a crucial role in the Irish economy. The Irish government has implemented policies to support economic growth and innovation. The country has a competitive corporate tax regime that has attracted multinational corporations.

Ireland is known for its relatively high quality of life, and it has invested in areas such as education and healthcare. Ireland also has a rich cultural heritage, with a strong emphasis on music, literature, and traditional arts.

Contract of Employment

In Ireland, employment contracts can be either written or verbal, and they can also be a combination of both. While it is legally acceptable to have a verbal employment contract, it is strongly recommended for employers to provide a written contract to employees.

The Terms of Employment (Information) Acts 1994-2014 in Ireland outline certain terms and conditions of employment that employers must provide to employees in writing within the first two months of starting employment.

Probation Period

The probationary periods of employees should not exceed 6 months.


The statutory minimum notice periods are based on the employee’s length of service with the employer.

Less than 13 weeks: No notice is required.
13 weeks to 2 years: 1 weeks’ notice.
2 years to 5 years: 2 weeks’ notice.
5 years to 10 years: 4 weeks’ notice.
10 years to 15 years: 6 weeks’ notice.
15 years or more: 8 weeks’ notice.

Employment contracts may specify longer notice periods, and employers may choose to pay in lieu of notice. During the probationary period, notice periods are typically shorter. Termination for cause may involve shorter notice or none, but fair procedures must be followed. Collective agreements may also impact notice periods.

Working Hours

The standard working week in Ireland is typically 39 hours, spread over five days and maximum average working week, including overtime, is generally set at 48 hours.


Any hours worked beyond 39 hours are considered overtime. Overtime rates, which are higher than the normal hourly rate, may vary and are often at least 1.5 times the standard rate. The maximum average working week, including overtime, is 48 hours, calculated over a reference period. Overtime can be voluntary or compulsory, and employers must comply with employment legislation, providing reasonable notice for compulsory overtime. Night work overtime rates are typically higher.

13th Month Pay

In Ireland, the concept of a “13th-month pay” is not a standard practice as it is in some other countries. Regular pay and additional benefits, such as bonuses, are typically addressed in the employment contract or through company policies. The standard practice is to provide employees with their agreed-upon salary, and any bonuses or additional payments are usually specified separately.

Annual Leave

Full-time employees are entitled to a minimum of 20 days of paid annual leave per year.

Sick leave

From 1 January 2024, paid sick leave will increase from 3 to 5 days a year. Sick leave entitlements, including the duration and conditions for taking sick leave, are commonly outlined in employment contracts and company policies.

Maternity and Paternity Leave

Eligible employees are entitled to 26 weeks of maternity leave. This is followed by an additional 16 weeks of maternity leave, which is unpaid. During the unpaid period, employees may qualify for maternity benefit from the Department of Social Protection.

Eligible employees are entitled to paternity leave of 2 weeks. The leave can be taken at any time within 26 weeks of the birth or adoption placement of a child.


The standard VAT rate in Ireland is 23%, which is applicable to a wide range of goods and services. There are two lower VAT rates of 13.5% and 9%, and a super-reduced rate of 4.8%. Additionally, Ireland has certain zero-rated goods, and while no VAT is imposed on their sale, they still need to be accounted for in your VAT return.

Income Tax

Filing status 2023 (EUR)
Tax at 20% Tax at 40%
Single and widowed person:
no dependent children
Income up to 40,000 Balance of income over 40,000
Married couple: one income Income up to 49,000 Balance of income over 49,000
Married couple: two incomes Income up to 80,000 Balance of income over 80,000

A person residing in Ireland but not having permanent domicile in the country is subject to Irish income tax on income earned within Ireland, foreign employment income obtained while performing duties in Ireland, and on foreign income brought into Ireland.

For individual who is not a resident, Irish income tax typically applies only to income derived from sources within Ireland.

 Employer / Employee Contributions

Employees in Ireland make several contributions through the Pay as You Earn (PAYE) system:

Income Tax: Deducted at source, income tax is progressive, with rates based on income levels.

Universal Social Charge (USC): USC, a separate tax on gross income, is deducted at source through PAYE. Rates and thresholds vary based on income.

Pay-Related Social Insurance (PRSI): Deducted from wages, PRSI contributions fund social insurance benefits like pensions, illness benefits, and maternity benefits. Rates vary depending on earnings.

Employers in Ireland fulfil financial obligations through various contributions and responsibilities:

Employer PRSI: Based on employees’ gross earnings, employer PRSI contributions are mandatory and fund social insurance benefits.

Employer’s Payroll Taxes: Employers handle the deduction and remittance of payroll taxes on behalf of employees, encompassing income tax, USC, and employee PRSI.

Pension Contributions: Employers may voluntarily contribute to occupational pension schemes, contingent on employment terms and company policies.

Other Benefits: Employers may offer additional perks like health insurance, company cars, or share options. Taxation on these benefits varies, and some may be subject to tax.

Public Holidays

January 1 – New Year’s Day
March 17 – St. Patrick’s Day
Easter Monday – Date varies each year.
May Day – First Monday in May
June Bank Holiday – First Monday in June
August Bank Holiday – First Monday in August
October Bank Holiday – Last Monday in October
December 25 – Christmas Day
December 26 – St. Stephen’s Day

Severance Pay

In Ireland, severance pay for private sector employees is not mandated by specific statutory requirements but is commonly addressed through various means:

Redundancy Payments: Termination due to redundancy may trigger entitlement to redundancy payments. These payments consider factors like the employee’s length of service, age, and weekly earnings.

Statutory Redundancy Payment: The Redundancy Payments Acts 1967–2014 establish a statutory framework for redundancy payments. Employees with at least two years of continuous service may qualify for a statutory redundancy payment, calculated based on length of service, capped earnings, and a multiplier.

Contractual Severance Pay: Employment contracts or collective agreements may stipulate severance pay terms, potentially in addition to statutory redundancy payments. The specifics of these payments are typically outlined in the employment contract.

Negotiated Agreements: Severance pay can result from negotiations between employers and employees, particularly in cases of voluntary or mutually agreed terminations.

Tax Treatment: Severance pays, including redundancy payments, may be subject to taxation. The tax implications depend on factors such as the payment amount, the reason for termination, and any relevant tax exemptions.

Work and Residence Permits (Expatriates)

Work Permits for Non-EEA Nationals:

Employment Permits: Non-European Economic Area (EEA) nationals generally require an employment permit to work in Ireland. Employment permits are issued by the Department of Enterprise, Trade, and Employment. Different types of permits are available, such as Critical Skills Employment Permits, General Employment Permits, and others.

Critical Skills Employment Permit: This permit is designed for highly skilled workers in occupations where there is a skills shortage in Ireland. It allows for more flexibility in terms of job mobility and eligibility for long-term residence.

General Employment Permit: This permit is for occupations that are not covered by the Critical Skills list. It requires a job offer from an Irish employer.

Intra-Company Transfer Permits: For employees transferring within the same company from a foreign branch to an Irish branch.

Residence Permits for Non-EEA Nationals:

Irish Residence Permit (IRP): Non-EEA nationals coming to Ireland may need to obtain an IRP, which serves as both a residence permit and an identity card. It is typically issued in conjunction with an employment permit.

Stamp 1, Stamp 1A, Stamp 2, etc.: These stamps are used to denote different types of permissions and conditions for non-EEA nationals in Ireland. The specific stamp will depend on factors such as employment status, family reunification, or study.

European Union (EU) and EEA Nationals:

Free Movement: Citizens of EU and EEA member states generally have the right to live and work in Ireland without the need for specific work permits. However, some restrictions may apply.

Registration with the Garda National Immigration Bureau (GNIB): EU and EEA nationals staying in Ireland for more than three months may need to register with the GNIB.

It’s important to note that immigration policies are subject to change, and individuals planning to work and reside in Ireland should check with the Irish Naturalisation and Immigration Service (INIS) or seek advice from legal professionals for the most up-to-date and accurate information.

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