Payroll fundamentals
PAYE (Pay As You Earn)
The Irish system for collecting Income Tax from employment income through payroll. The employer calculates and deducts Income Tax using the latest Revenue Payroll Notification (RPN), then reports the pay and deductions to Revenue.
Running Payroll in Ireland guide →PAYE Modernisation
The name commonly used for the real-time PAYE reporting system introduced in 2019. Employers now report pay and statutory deductions to Revenue on or before the employee's pay date rather than relying on an annual end-of-year employer return.
Payroll Submission
The electronic payroll report sent to Revenue for an employee. It includes the pay date, pay and statutory deductions, plus other required payroll information. Employers must report payroll information to Revenue on or before the date the employee is paid.
Employer Reference
A reference used by an employer when a payroll submission must be made for a person whose PPSN is not yet available. Revenue requires the Employer Reference to remain consistent so earlier payroll records can be matched once the PPSN is supplied.
Running Payroll in Ireland guide →Pay date
The date the employee is actually paid. Revenue uses the pay date to determine the reporting period, and the employer must make the payroll submission on or before that date.
Gross pay
The employee's pay before payroll deductions are taken. Depending on the rule being applied, gross pay can include salary, wages, overtime, bonuses, commission and other taxable amounts.
Net pay
The amount paid to an employee after Income Tax, USC, PRSI and any other lawful or authorised deductions have been taken from the relevant pay.
Taxable pay
The amount of pay that is brought into a particular tax calculation. The taxable base can differ between Income Tax, USC, PRSI and benefit-in-kind rules, so "taxable pay" should always be read in the context of the deduction being calculated.
Payslip
The written statement an employee must receive with each payment of wages. It should show gross pay and itemise the deductions made from that payment so the employee can see how net pay was calculated.
Tax year
The Irish income tax year, running from 1 January to 31 December.
Revenue registration and payroll administration
PREM registration
Employer PAYE/PRSI registration with Revenue. A business must register as an employer before paying employees, and a company must operate PAYE on payments to directors even where it has no other employees.
Running Payroll in Ireland guide →Separate PAYE registration numbers
Revenue can allow an employer to operate more than one employer PAYE registration, for example for different branches, employee groups, pensions or directors. Each registration has its own payroll reporting and payment obligations, subject to Revenue's conditions.
Payroll for Multi-Site Businesses →ROS (Revenue Online Service)
Revenue's online service for businesses, employers, and tax agents, used for payroll registrations, submissions, and other employer obligations.
myAccount
Revenue's online service for individuals, used by employees to register a new job, manage their own tax credits, and split credits and rate band across multiple employments.
PPSN (Personal Public Service Number)
An individual's unique public-service identifier used by Revenue and other State bodies. A PPSN should be used in payroll when available, but Revenue provides an Employer Reference process where a payroll submission must be made before a PPSN is available.
RPN (Revenue Payroll Notification)
The payroll instruction Revenue provides for an employee. Before running payroll, the employer must request the latest RPN and use it to apply the current Income Tax and USC credits and cut-off points, LPT deduction where applicable, and other Revenue instructions.
Revenue Payroll Notification (RPN) guide →Employment Identifier
A code that uniquely identifies a particular employment in Revenue's PAYE system. It helps distinguish separate employments with the same employer and is also important where a former employee is later rehired under a new employment.
Revenue Payroll Notification (RPN) guide →TAIN (Tax Advisor Identification Number)
An identifier issued by Revenue to an authorised tax agent or advisor for acting on a client's behalf through Revenue's agent systems. It identifies the agent, not the client, distinct from a client's own PPSN.
Payroll for Accountants →Agent
A tax agent, payroll agent, or other advisor authorised by Revenue, under a TAIN, to interact with Revenue's systems on behalf of a client.
Agent link
The authorisation connecting an agent's TAIN to a specific client's Revenue record, defining what the agent can access and act on for that client.
Payroll agent link
A Revenue agent authorisation that allows an agent to perform employer payroll functions for a client. The exact scope depends on the agent permission in place. A Payroll Only permission is narrower than permissions that also cover ERR or other employer reporting.
Payroll for Accountants →ERR agent / Global Mobility agent / Financial agent
Revenue uses different agent permission categories for employer PAYE work — Financial Agent, Payroll and ERR Agent, Payroll Only Agent and ERR Only Agent. Global Mobility permissions can also be relevant to certain employer client links. The authorised scope should be confirmed before work starts.
Agent e-linking
Revenue's electronic process for establishing an agent relationship. For clients within the e-linking process, the agent requests the link and the client can review and approve or reject it through ROS or myAccount. The permissions granted determine what the agent can do.
Payroll for Accountants →Income tax, USC, and PRSI
Income Tax
The tax charged on income, collected from employees through the PAYE system based on their tax credits and rate band as specified on their RPN.
Tax credits
Amounts that reduce an employee's income tax liability, allocated by Revenue based on personal circumstances and communicated to the employer via the RPN.
Standard rate cut-off point (tax band)
The income threshold up to which the lower income tax rate applies; income above it is taxed at the higher rate.
USC (Universal Social Charge)
A separate charge on certain income, calculated under USC-specific thresholds, rates and exemptions. It is not the same as Income Tax, even though both are commonly calculated through payroll.
USC cut-off points
The thresholds used to determine how an employee's income is divided between the applicable USC rates. The employee's current USC instructions are communicated to the employer through the RPN.
LPT (Local Property Tax) deduction at source
Where Revenue instructs an employer to deduct Local Property Tax through payroll, the amount is included on the employee's RPN. The employer deducts the amount through payroll in line with the Revenue instruction.
Revenue Payroll Notification (RPN) guide →PRSI (Pay Related Social Insurance)
The Irish social insurance system. The amount due, the applicable rate and whether an employer contribution is also payable depend on the person's PRSI class and circumstances.
PRSI class
The social-insurance category that determines the PRSI rules applying to an employee, director or self-employed person. The correct class depends on the facts and should not be assumed from a job title alone.
Employer PRSI
The employer's PRSI contribution where the applicable PRSI class requires one. It is an employer cost in addition to the employee's gross pay and is calculated under the rules for that PRSI class.
Cumulative basis
The standard method of calculating tax, factoring in pay and credits accumulated from the start of the tax year.
Week 1 / Month 1 basis
A non-cumulative method of calculating Income Tax and USC. It is used when the employee's RPN instructs the employer to use Week 1 or Month 1 basis, so credits and rate bands apply only to the current pay period rather than accumulating from 1 January.
Revenue Payroll Notification (RPN) guide →Emergency basis / emergency tax
The basis an employer must use where a valid RPN is not available. Revenue's emergency tax rules apply until the employer receives an RPN. The exact deduction can depend on factors such as whether the employee has supplied a PPSN and how long emergency treatment has been in use.
Revenue Payroll Notification (RPN) guide →PAYE Exclusion Order
A Revenue authorisation that can relieve an employer from deducting Income Tax and USC from specified employment income where the relevant conditions are met. It is fact-dependent, and PRSI or other reporting obligations can still arise.
Benefits and expenses
BIK (Benefit-in-Kind)
A non-cash benefit provided by an employer, such as private use of a company car. Where the benefit is taxable, its value is treated as notional pay and the employer operates Income Tax, USC and PRSI through payroll.
Director Payroll in Ireland guide →Notional pay
The taxable value assigned to certain non-cash benefits for payroll purposes. The notional amount is added to the relevant payroll calculation so Income Tax, USC and PRSI can be operated where required.
OMV (Original Market Value)
For company-car BIK, the value of the car in Ireland before its first registration, including the applicable Irish taxes and duties. Revenue's rules require OMV to be used even where the employer later buys the car second-hand.
Payroll for Motor Trade Businesses →Motor industry OMV simplification
A Revenue arrangement for qualifying employers in the car and motor industry. Revenue publishes reduced OMV figures that may be used for certain vehicles when calculating company-car BIK, subject to the conditions of the arrangement.
Payroll for Motor Trade Businesses →Small Benefit Exemption
A Revenue exemption that allows an employer to provide up to five qualifying non-cash benefits in a tax year without Income Tax, USC or PRSI, subject to a combined annual limit of €1,500 in 2026. Unused amounts do not carry forward.
Enhanced Reporting Requirements (ERR) guide →Remote Working Daily Allowance
An employer may pay up to €3.20 for each qualifying remote-working day without deducting Income Tax, USC or PRSI, subject to Revenue's conditions. The payment is one of the categories that must be reported under ERR.
Enhanced Reporting Requirements (ERR) guide →Remote Working Relief
A separate tax relief that an employee may claim personally for qualifying remote-working expenses. It is different from the employer-paid Remote Working Daily Allowance and has its own calculation and conditions.
ERR (Enhanced Reporting Requirement)
Revenue's reporting requirement for specified tax-free benefits and expenses, including qualifying travel and subsistence, Small Benefit Exemption items and the Remote Working Daily Allowance. The required information must be reported on or before the date the payment or benefit is provided.
Enhanced Reporting Requirements (ERR) guide →Vouched expenses
Expense payments backed by a receipt or other proof of the actual cost incurred.
Unvouched expenses
Expense payments made without an individual receipt for every amount, often by reference to an approved rate. A payment is not automatically tax-free because it is called an expense, and qualifying travel and subsistence payments can be reportable under ERR.
Travel and subsistence
Payments relating to qualifying business travel and associated subsistence costs. Tax-free treatment depends on Revenue's rules, the nature of the journey and the employee's circumstances. Qualifying tax-free payments within ERR must also be reported to Revenue.
MyFutureFund
MyFutureFund
Ireland's automatic-enrolment retirement savings system, branded MyFutureFund and live from 1 January 2026. NAERSA identifies eligible employees from payroll data, enrols them and sends the employer the payroll notification needed to process contributions.
MyFutureFund employer guide →NAERSA
The National Automatic Enrolment Retirement Savings Authority, the public body that administers MyFutureFund. NAERSA runs eligibility checks, enrols participants, manages contribution administration and issues Automatic Enrolment Payroll Notifications to employers.
MyFutureFund employer guide →Automatic enrolment
The process through which NAERSA enrols an employee into MyFutureFund when the statutory conditions are met. Employers and payroll providers do not make the final eligibility determination; they apply the enrolment information issued through the scheme.
AEPN (Automatic Enrolment Payroll Notification)
The Automatic Enrolment Payroll Notification issued by NAERSA to payroll. It tells the employer which employees are enrolled and provides the contribution information that must be applied when payroll is run.
MyFutureFund employer guide →Qualifying pension arrangement
A phrase often used for alternative workplace pension coverage. Under current MyFutureFund guidance, an employee is generally not automatically enrolled for an employment where payroll data shows an active employee or employer pension contribution. Separate minimum standards for existing schemes are not yet in force.
Minimum contribution standards
Current MyFutureFund guidance does not require an existing pension scheme to meet a separate minimum contribution test to keep an employment outside automatic enrolment. Formal standards for existing schemes are expected to be developed later, with the Pensions Authority involved, so this area should be checked before relying on older thresholds.
MyFutureFund employer guide →Employee contribution (MyFutureFund)
The employee contribution deducted through payroll for an enrolled participant. The rate is 1.5% of relevant gross earnings for 2026 to 2028, subject to the scheme's annual earnings limit and future scheduled rate increases.
Employer contribution (MyFutureFund)
The employer contribution payable for an enrolled participant. The rate is 1.5% for 2026 to 2028, calculated under the MyFutureFund rules and subject to the annual earnings limit and future scheduled rate increases.
State contribution (MyFutureFund)
The State top-up paid into an enrolled employee's MyFutureFund account. The published rate is 0.5% for 2026 to 2028, alongside the employee and employer contributions.
Earnings cap (MyFutureFund)
The annual gross-earnings limit used for MyFutureFund contributions. Contributions are capped when the participant reaches €80,000 of relevant gross earnings in the tax year, with NAERSA updating payroll notifications where multiple employments are involved.
Opt-out
The statutory process that allows an enrolled employee to leave MyFutureFund after the initial mandatory participation period, during the permitted opt-out window. Employee contributions are refunded in accordance with the scheme rules, while employer and State amounts are treated under the statutory process.
Suspension
A MyFutureFund option that lets an employee pause contributions outside the initial six-month mandatory participation period. A suspension can last for up to two years and is different from an opt-out because the contribution and refund rules are not the same.
Re-enrolment
The process through which a person who opted out or suspended contributions can be brought back into MyFutureFund after two years if they still meet the eligibility conditions. NAERSA manages the process and issues updated payroll information.
PRSA (Personal Retirement Savings Account)
A personal retirement savings product that can be used by employees and self-employed people. MyFutureFund does not remove existing PRSA access obligations, which can still apply to employers under the separate pensions rules.
Directors and international payroll
Proprietary director
For Revenue's proprietary-director tax rules, this generally means a director who beneficially owns, or can directly or indirectly control, more than 15% of the company's ordinary share capital. Proprietary-director status has consequences for self-assessment and some tax credits.
Director Payroll in Ireland guide →Non-proprietary director
A director who does not meet the relevant proprietary-director ownership or control test. Director remuneration is still generally within the PAYE system, but PRSI and other tax treatment should be considered under the rules applying to the individual's circumstances.
Director Payroll in Ireland guide →Chargeable person
A person within the self-assessment system who is required to make a tax return under the relevant rules. Proprietary directors are generally chargeable persons and are required to file Form 11 returns.
Director Payroll in Ireland guide →Form 11
Revenue's annual self-assessment Income Tax return for chargeable persons, including proprietary directors. Filing a Form 11 is separate from the company's obligation to process director remuneration correctly through payroll.
Director Payroll in Ireland guide →Preliminary tax
An advance payment toward a person's Income Tax liability for the current tax year under self-assessment. The amount and payment deadline are governed by Revenue's self-assessment rules, so it should not be confused with payroll deductions.
Director Payroll in Ireland guide →PRSI Class S
The PRSI class generally used for self-employed people. Department of Social Protection guidance classifies proprietary directors who own or control 50% or more of a company, directly or indirectly, as self-employed for PRSI and liable at Class S.
Director Payroll in Ireland guide →PRSI Class A
The main employee PRSI class. A director can fall within Class A where the circumstances support employee insurability, but directors below the Class S ownership or control threshold should not automatically be assumed to be Class A without considering the facts.
Director Payroll in Ireland guide →Scope Section
The Department of Social Protection service that determines insurability and the correct PRSI class where status is uncertain. A Scope decision can be important for directors, family employment and other borderline cases.
Director Payroll in Ireland guide →SARP (Special Assignee Relief Programme)
A relief for qualifying employees assigned to Ireland. For qualifying arrivals after 1 January 2026, 30% of relevant employment income above €125,000 can be disregarded for Income Tax, subject to a €1 million income limit and the other SARP conditions. USC is not relieved, and PRSI follows the normal social-insurance rules.
Payroll for Tech Companies & Startups →Shadow payroll
An Irish payroll reporting arrangement used where an internationally mobile employee is paid through a payroll outside Ireland but Irish PAYE reporting or withholding obligations still arise. The correct treatment depends on residence, duties, treaty provisions and Revenue rules.
Employment rights and payroll
National Minimum Wage
The statutory minimum hourly pay rate for most employees. From 1 January 2026, the rate for employees aged 20 and over is €14.15 per hour, with age-based rates for younger employees and separate sectoral rates applying in some industries.
Pay reference period
The period used to test an employee's average hourly pay against the National Minimum Wage. The employer selects the period for the employee; it may be one week but cannot be longer than one month.
Working time
The statutory rules governing working hours, daily and weekly rest, and breaks. The Organisation of Working Time framework generally limits average weekly working time and sets minimum rest and break entitlements, subject to specific exceptions.
Overtime
Hours worked beyond an employee's normal hours. Irish law does not create one general statutory overtime premium for every employee; the rate can come from the employment contract, collective arrangements, an ERO, an SEO or another applicable rule.
Sunday premium
Compensation for Sunday work where the fact of working Sunday has not already been taken into account in the employee's pay. It can take the form of an allowance, higher pay, paid time off or a combination, and there is no single statutory percentage for all workers.
Payroll for Retail & Hospitality Businesses →Annual leave
Statutory paid leave that accrues through employment. Most employees are entitled to up to four working weeks in a leave year under the statutory calculation methods, with the appropriate method depending on the employee's hours and working pattern.
Public holiday
A statutory public-holiday benefit. Full-time employees have an immediate entitlement, while a part-time employee generally qualifies after working at least 40 hours in the five weeks before the public holiday. The form of the benefit depends on the statutory options.
Statutory sick leave
The statutory minimum paid sick-leave entitlement. In 2026 it remains five days per calendar year, paid at 70% of normal daily earnings up to €110 per day, subject to the qualifying conditions including 13 weeks' continuous service and medical certification.
Maternity leave
Statutory leave available to an employee around the birth of a child, with a separate Department of Social Protection Maternity Benefit payable during qualifying leave.
Paternity leave
Statutory leave available to a second parent following the birth or adoption of a child, with a corresponding Paternity Benefit available from the Department of Social Protection.
Parent's leave
A separate statutory leave entitlement for each parent in a child's early years, with an associated Parent's Benefit.
Parental leave
Unpaid statutory leave available to a parent to care for a child up to a certain age, distinct from Parent's Leave.
Adoptive leave
Statutory leave available to an adopting parent, broadly equivalent in structure to maternity leave.
Force majeure leave
A short statutory leave entitlement for urgent family emergencies, paid by the employer rather than through a DSP benefit.
Notice period
The minimum period of notice an employer or employee must give to end employment, set by statute and often extended by contract.
Tips and gratuities
Payments made by customers in recognition of service. Irish law regulates how electronic tips and gratuities are distributed and how employers communicate their policy. The payroll and tax treatment depends on how the payment is collected and passed to staff.
Payroll for Retail & Hospitality Businesses →Sector-specific payroll
RCT (Relevant Contracts Tax)
A withholding tax that applies to certain payments by principal contractors to subcontractors in construction, forestry and meat processing. Current RCT rates are 0%, 20% and 35%, with the subcontractor's Revenue compliance position determining the applicable rate.
Payroll for Construction Businesses →eWHT (electronic Withholding Tax)
A proposed electronic withholding-tax framework being considered for RCT and Professional Services Withholding Tax. Revenue published a consultation report in July 2026, but it did not make policy recommendations or establish a commencement date. RCT remains the current system.
Payroll for Construction Businesses →SEO (Sectoral Employment Order)
A legally binding order setting minimum pay and, where applicable, other employment conditions for workers in a specified sector. An SEO can create sector-specific payroll rules that sit alongside general employment legislation.
Payroll for Construction Businesses →ERO (Employment Regulation Order)
A legally binding order setting minimum pay and conditions for workers in an employment sector or category covered by a Joint Labour Committee. Employers must check whether an ERO applies before relying only on the general National Minimum Wage.
CWPS (Construction Workers' Pension Scheme)
The Construction Workers' Pension Scheme, a sector pension arrangement relevant to the construction industry. The Construction Sector SEO requires covered employers to provide pension benefits on terms no less favourable than the specified sector standard, and CWPS is a key reference point for that obligation.
Payroll for Construction Businesses →Site-based employee / country money
Construction terms that can be associated with site-related travel or allowance payments. The label used does not make a payment tax-free. Revenue's travel and subsistence rules and the employee's actual working arrangements determine the tax treatment.
Demonstrator / courtesy vehicle
A vehicle used by an employee in the motor trade, potentially with private use. Standard company-car BIK rules can apply, while qualifying motor-industry employers may be able to use Revenue's prescribed OMV arrangement in the relevant circumstances.
Payroll for Motor Trade Businesses →Department payroll (schools)
Payroll operated by the Department of Education for staff categories and employments that fall within Department payroll arrangements. Whether a particular employee is Department-paid depends on the applicable employment and funding arrangement, so job title alone should not be treated as conclusive.
Payroll for Schools & Education Providers →Board payroll (schools)
Payroll for staff whom a school or Board of Management itself employs and is responsible for paying. The exact staff categories vary by school, scheme and employment arrangement, so the employer and paymaster should be confirmed before payroll is set up.
Payroll for Schools & Education Providers →Payroll terms for employers
Starter
A new employee being brought onto payroll. The employer should request an RPN and report the employment start date. Where a PPSN is not yet available, Revenue's Employer Reference process and emergency-basis rules may need to be used.
Leaver
An employee whose employment is ending. The employer reports the date of leaving in the payroll submission and processes final pay using the applicable payroll and Revenue instructions.
Payroll frequency
How often payroll is run for an employee or employee group. Common Irish frequencies include weekly, fortnightly, four-weekly and monthly, and the tax calculation must use the correct pay-period treatment.
Payroll cut-off
The deadline by which payroll inputs (hours, changes, new starters) must be submitted for a given pay run to be processed correctly and on time.
Payroll correction
The process used to correct payroll where pay, deductions or a Revenue submission was wrong. The correct method depends on what actually happened, for example whether the employee was underpaid, overpaid or the reported payroll record itself needs amendment.
Back pay
Pay owed for a past period, often arising from a late-processed pay rise, correction, or scale increment applied retrospectively.
Overpayment / underpayment
A situation where the employee received more or less pay than was properly due. The correction should reflect what actually happened and follow the appropriate payroll, tax and employment-law process rather than relying on an unexplained net adjustment.
Holiday pay
Payment due to an employee for a period of annual leave, calculated according to their normal pay and working pattern.
Bonus
An additional contractual or discretionary payment made to an employee. A cash bonus is generally processed as pay through payroll in the period in which it is paid, using the employee's current Revenue instructions.
Commission
Performance-related pay, often linked to sales. Commission can count as reckonable pay when testing the National Minimum Wage, while some premiums and expense payments cannot, so the components should be separated correctly.
Payroll for Motor Trade Businesses →Salary sacrifice
An arrangement in which an employee gives up part of cash salary in return for a benefit. Irish tax treatment depends on the benefit and the specific statutory rules, so salary sacrifice does not automatically create a tax saving.