Unsure what an RPN, PRSI subclass or benefit in kind means? This A to Z glossary explains the payroll terms Irish employers and employees encounter most often. Definitions cover PAYE, USC, pensions, employment rights and Revenue reporting, with 2026 figures where useful.
For official rules, use the linked guidance beside each relevant term. Payroll outcomes depend on the employee’s circumstances and the rates in force on the pay date.
A
A0 (PRSI Subclass). Class A subclass for employees with weekly reckonable earnings of €38.01 to €352. No employee PRSI is payable. Employer PRSI at the lower Class A rate applies (9.00% throughout 2026; note: the A0 lower employer rate does not increase to 9.15% in October 2026; the 9.15% October increase applies to AX and AL). Official guidance
AEPN (Automatic Enrolment Payroll Notification). A notification issued by NAERSA to an employer instructing the employer to enrol or change the contribution rate for an employee in My Future Fund. Employers must apply the current AEPN for each relevant pay run. Eligibility is determined by NAERSA through the statutory auto-enrolment process; employers follow the AEPN rather than independently deciding whether an employee qualifies.
AE (Auto-Enrolment). Shorthand for the My Future Fund automatic enrolment system. Eligible employees are enrolled by NAERSA without requiring them to opt in. See My Future Fund.
AL (PRSI Subclass). Class A subclass for employees with weekly reckonable earnings of €424.01 to €552. Full employee PRSI rate (4.20% to 30 September 2026; 4.35% from 1 October 2026). Employer PRSI at the lower rate (9.00% to September; 9.15% from October 2026).
Annual Leave. Paid time off under the Organisation of Working Time Act 1997. The applicable statutory calculation is the most favourable of the four-working-week method (where 1,365 hours are worked), one-third of a normal working week for each month with at least 117 hours, or 8% of hours worked, capped at four normal working weeks. Protected absences can count towards leave entitlement. Official guidance
ASC (Additional Superannuation Contribution). A deduction from public-servant pay that replaced the pension levy. Employee PRSI is chargeable on the ASC; employer PRSI is not. Previously known as the pension levy.
AVC (Additional Voluntary Contribution). Extra pension contributions made by an employee beyond the mandatory occupational scheme rate. Qualifying AVCs can attract income tax relief within Revenue’s age-related limits but do not reduce USC or PRSI.
AX (PRSI Subclass). Class A subclass for employees with weekly reckonable earnings of €352.01 to €424. Employee PRSI at 4.20% (to 30 September 2026) or 4.35% (from 1 October 2026) minus a tapered PRSI credit of up to €12 per week. Employer PRSI at the lower rate (9.00% to September; 9.15% from October 2026).
B
Banded Hours. Under the Employment (Miscellaneous Provisions) Act 2018, an employee who has worked 12 months may submit a written request for a band of weekly hours reflecting their actual average hours. The employer has 4 weeks to consider the request and may refuse on statutory grounds set out in the Act. Eight bands run from 3–6 hours to 36+ hours. A banded-hours decision affects the contractual/expected hours arrangement; each statutory entitlement (annual leave, holiday pay, sick pay) continues to be calculated under its own rules.
BIK (Benefit in Kind). A non-cash benefit provided by an employer that has a taxable value. BIK increases the employee’s taxable/notional remuneration for PAYE, USC and PRSI purposes; but does not increase their cash gross pay. The cash equivalent of BIK is treated as notional pay in the payroll submission. Distinguish cash gross pay (salary, wages, bonus) from the notional pay element (BIK/non-cash benefits). Official guidance
Bonus. A cash or non-cash payment in addition to regular salary. Subject to PAYE, USC and PRSI. Included in the payroll submission for the pay date on which paid.
C
Cash Gross Pay. The total cash earnings paid to an employee; salary, wages, overtime, commission, cash bonus and similar cash remuneration; before deductions. Distinct from taxable/notional remuneration, which also includes the monetary value of BIK.
Cash Equivalent. The monetary value placed on a BIK for PAYE, USC and PRSI purposes. Revenue prescribes the calculation method for each benefit category (for example, company car cash equivalent is based on OMV, CO2 category and annual business mileage).
Cessation Date. The date an employee’s employment ends. Reported in the employer’s final payroll submission for that employee. Employees view cessation details via Revenue myAccount.
Civil Service Rates. Revenue’s approved benchmark rates for tax-free reimbursement of qualifying business travel and subsistence. Staying within civil service rates does not automatically make a payment tax-free; the underlying journey must independently satisfy Revenue’s qualifying conditions. Qualifying payments must be reported via ERR.
Class A (PRSI). The main social insurance class for private-sector employees and many public servants recruited from 6 April 1995, normally when weekly reckonable earnings are at least €38. Weekly earnings determine the A0, AX, AL or A1 subclass. The standard employee rate rises from 4.20% to 4.35% on 1 October 2026, subject to the A0 nil rate and the tapered AX credit. Official guidance
Class A1 (PRSI Subclass). Class A subclass for employees with weekly earnings above €552. Full employee rate (4.20%/4.35%). Higher employer rate: 11.25% to 30 September 2026; 11.40% from 1 October 2026.
Class B (PRSI). Modified class for certain pre-1995 civil servants, Gardaí, and registered doctors/dentists in the Civil Service. 2026 employer rate: 2.21% (to 30 Sep) / 2.36% (from 1 Oct). Limited benefit entitlements; does not cover standard Jobseeker’s or Illness Benefit.
Class C (PRSI). Modified class for pre-1995 commissioned Army Officers and Army Nursing Service. 2026 employer rate: 2.05% (to 30 Sep) / 2.20% (from 1 Oct).
Class D (PRSI). Modified class for other pre-1995 permanent pensionable public servants. 2026 employer rate: 2.55% (to 30 Sep) / 2.70% (from 1 Oct).
Class H (PRSI). Class for non-commissioned officers and enlisted Defence Forces members. 2026 employer rate: 10.55% (to 30 Sep) / 10.70% (from 1 Oct). Includes the 1% National Training Fund Levy.
Class J (PRSI). A limited-insurance class used for some low-paid, subsidiary and post-pension-age employments, subject to the detailed class conditions. Employee PRSI is usually nil, while employer PRSI is generally payable. Class J does not provide the full Class A benefit package.
Class K (PRSI). Class for certain public office holders and those with specified unearned income. Employee rate: 4.20%/4.35%. No employer PRSI. Class K contributions do not build any social insurance benefit entitlements.
Class M (PRSI). A nil-contribution recording class applying to specified persons with no PRSI contribution liability, including employees under age 16 and certain persons whose former Class S liability has ceased because of age or receipt of State Pension (Contributory). Since 1 January 2024, people born on or after 1 January 1958 may continue to pay Class S between ages 66 and 70 if they defer State Pension (Contributory). Class M applies when the liability ceases; the trigger depends on date of birth, pension receipt and reaching age 70. Always check the current DSP age/pension-status rules.
Class S (PRSI). The social insurance class for most self-employed people and directors with the relevant statutory ownership or control. Rates are 4.20% until 30 September 2026 and 4.35% from 1 October. The annual minimum contribution is generally €650 once the €5,000 reckonable-income threshold is met. A blended rate of 4.2375% applies to relevant annual self-assessment calculations, not automatically to company-director payroll deductions. There is no employer Class S PRSI. A director’s classification may need a DSP Scope decision. Official guidance
Code of Practice for Revenue Compliance Interventions. Revenue’s framework governing employment tax compliance checks, risk reviews, audits and investigations. Establishes the three-level framework (Level 1, 2, 3) and the conditions for self-correction and qualifying disclosure. Effective from 1 May 2022.
Commencement Date. The date an employee’s employment begins. Employers must retrieve the RPN before the first pay date.
Commission. Variable pay calculated as a percentage of sales or performance. Subject to PAYE, USC and PRSI. May be included in holiday pay calculations as part of normal remuneration.
Contribution Week (PRSI). The seven-day period from Thursday to Wednesday. PRSI contribution records depend on the employee’s insurability class and the applicable contribution-week rules. Where an employee is insurable at Class A or Class J in a given week, that week may count toward their social insurance record. Verify via myWelfare.ie.
Cumulative Basis. The standard PAYE calculation basis where all pay and tax credits from 1 January of the tax year are accumulated. Overpayments and underpayments in one period are automatically corrected in subsequent periods. The RPN indicates if this basis applies. Contrast with Week 1/Month 1 Basis.
D
Day-5 Terms. The obligation under the Employment (Miscellaneous Provisions) Act 2018 to provide prescribed core written terms within 5 days of commencement. For variable-hours arrangements, core terms must include the reasonably expected number of normal working hours and conditions relating to hours where the work pattern is unpredictable.
Director. An officer of a company appointed to the board. Directors may be executive or non-executive. PRSI classification depends on shareholding, control and the nature of duties. Director remuneration is generally subject to PAYE and USC under s.112 TCA 1997, regardless of PRSI class.
Double Taxation Agreement (DTA). A treaty between Ireland and another country allocating taxing rights over income. A DTA may relieve some directorship income from Irish tax; but only where Revenue has issued a PAYE Exclusion Order accepting the treaty position. A DTA is an income tax treaty and does not itself determine PRSI liability; PRSI is a separate social security analysis.
DSP (Department of Social Protection). The government department responsible for PRSI administration, social welfare payments, the State Pension (Contributory), Illness Benefit, Jobseeker’s Benefit, My Future Fund/NAERSA, and the Scope Section for PRSI class determinations.
E
EDS (Employment Detail Summary). Replaced the P60 from 1 January 2019. Generated automatically by Revenue from employer payroll submission data. Available to employees via Revenue myAccount from January of the following year.
Emergency Tax. Temporary PAYE treatment where a valid Revenue Payroll Notification is unavailable. The calculation depends on whether the employee has provided a PPSN and how long emergency basis has applied. Emergency USC may also apply. Retrieve and use the RPN as soon as available; employee PRSI is still assessed under its normal class rules.
Employer of Record (EOR). An organisation that formally employs a worker on behalf of another business and handles agreed employment and payroll responsibilities. The arrangement does not necessarily remove all Irish tax, immigration or legal exposures for the client business.
ERO (Employment Regulation Order). A legal instrument setting minimum pay rates and conditions for workers in specific sectors, issued by the Labour Court. ERO rates can exceed the National Minimum Wage.
ERR (Enhanced Reporting Requirements). An obligation from 1 January 2024 requiring employers to report specified non-taxable payments to Revenue on or before the date of payment or benefit provision. ERR categories: Small Benefit Exemption benefits, remote working daily allowances (€3.20/day), and qualifying travel and subsistence. Reported separately from the PSR. Official guidance
F
Flat Rate Expenses. Revenue-approved deductions for certain occupations that reduce income subject to Income Tax. They do not reduce USC or PRSI. Eligibility and rates depend on the occupation and a claim may be required through Revenue myAccount.
Form 11. The annual income tax return generally required from self-assessed taxpayers, including many proprietary directors. It is submitted through ROS. The standard filing date is 31 October following the relevant tax year, with an extended deadline sometimes available to qualifying online filers. Late-filing surcharges depend on the circumstances. Official guidance
Form 12 / Form 12S. A simplified tax return available to certain PAYE employees with additional income in specified circumstances. Eligibility depends on Revenue’s chargeable-person rules regarding the type, level and collectability of non-PAYE income. Check current Revenue guidance for the applicable conditions.
G
Gross Pay. In a cash payroll context, the total cash earnings paid to an employee before deductions; salary, wages, overtime, bonus and commission. For payroll tax purposes, ‘gross pay’ in a payroll submission also includes notional pay (BIK) because BIK increases the taxable/reckonable pay base even though no cash is paid. Where precision matters, distinguish cash gross pay from notional pay.
H
Holiday Pay. Pay received by an employee during annual leave. Must reflect the employee’s normal weekly rate as determined under the Organisation of Working Time legislation and applicable regulations. Where hours or remuneration vary, employers should apply the relevant averaging rules and include remuneration elements that form part of normal pay.
HRMC / HMRC. HMRC stands for His Majesty’s Revenue and Customs, the UK tax authority. In Ireland, the corresponding tax authority is Revenue. “HRMC” is a common misspelling of HMRC.
I
If-and-When Worker. A worker engaged under an arrangement where they are available to work if and when required but there is no guarantee of work. Regulated under the Employment (Miscellaneous Provisions) Act 2018. Where the statutory conditions apply, two minimum payment protections arise: the availability-based compensation rule (where a worker required to be available is not given at least 25% of available hours, compensation based on 25% of contracted hours or 15 hours whichever is less) and the called-in-but-insufficient-work rule (a minimum of three times the applicable NMW/ERO hourly rate on each occasion where the employee is called in but does not receive expected hours). These are separate rules with different triggers.
Income Tax. Tax on income in Ireland, generally deducted from employment earnings through PAYE. The 2026 standard rate is 20% and higher rate 40%; tax credits reduce the amount payable. Standard-rate bands depend on the person’s circumstances. Official guidance
Insurable Employment. Employment that is subject to PRSI. Class and rate depend on the nature of the employment, the level of earnings, and the employee’s age and pension status.
Invalidity Pension. A DSP benefit available to employees (and Class S contributors) incapable of work for at least 12 months due to illness or disability. Requires specific PRSI contribution conditions.
J
J0 / J1 (PRSI Subclass). Subclasses of Class J for employees whose weekly reckonable pay from all employments is below €38. Employee PRSI: nil. Employer PRSI: 0.70% (to 30 Sep 2026) / 0.85% (from 1 Oct 2026).
K
Karshan Five-Step Framework. A five-stage legal analysis used when deciding whether a worker is an employee or self-employed for tax purposes, following the Supreme Court’s Karshan judgment. It looks at remuneration for work, personal service, control, the overall reality of the arrangement and relevant legislation. A written contractor label is not decisive.
KEEP (Key Employee Engagement Programme). A Revenue-approved share option scheme for qualifying SME employees. Qualifying KEEP option gains are not subject to Income Tax, USC or PRSI on exercise. Capital Gains Tax may arise on a later disposal of the shares. Annual share scheme return (KEEP1) required by 31 March following the tax year.
L
LPT (Local Property Tax). A self-assessed tax on the market value of residential property. Can be collected through payroll where an employee instructs Revenue to deduct LPT from their salary.
Labour Court. The national tribunal for employment and industrial relations disputes. Issues EROs and SEOs and hears appeals from the WRC.
M
Marginal Rate. The rate of tax or statutory deductions on the next euro earned. The combined marginal deduction can include income tax, USC and employee PRSI. It depends on the employee’s own rate bands, PRSI class and the payment date, so a single headline percentage will not fit everyone.
Maternity Benefit. A DSP benefit paid to female employees on maternity leave for up to 26 weeks. Available to qualifying Class A and Class S contributors.
Medical Card. A card issued by the HSE. Relevant for USC: see USC (Reduced Rates entry within USC definition).
Modified PRSI Classes. PRSI classes B, C and D, applying to permanent pensionable civil and public servants recruited before 6 April 1995. Lower contribution rates; limited benefit entitlements.
Monthly Statement. Revenue’s monthly statement built from an employer’s payroll submissions. Employers review or correct it by the 14th of the following month; it becomes the statutory return if not amended. Payment deadlines depend on the payment method and ROS eligibility.
MyEnquiries. Revenue’s secure online messaging system for employers and taxpayers.
My Future Fund. Ireland’s statutory automatic enrolment retirement savings system, introduced in January 2026. The National Automatic Enrolment Retirement Savings Authority determines who qualifies and issues payroll instructions. Initial rates are 1.5% from the employee and 1.5% from the employer, with a State top-up. Eligibility, earnings limits and opt-out rules apply. Official guidance
myAccount. Revenue’s online portal for individual PAYE taxpayers; separate from ROS. Used for registering first employments, viewing Tax Credit Certificates, claiming reliefs, and accessing Employment Detail Summaries.
N
NAERSA (National Automatic Enrolment Retirement Savings Authority). The authority administering My Future Fund. It assesses eligibility using payroll data, issues Automatic Enrolment Payroll Notifications and administers contributions. Employers should act on the official notifications.
National Minimum Wage (NMW). The minimum hourly rate for employees in Ireland. From 1 January 2026: €14.15 (aged 20+), €12.74 (age 19), €11.32 (age 18), €9.91 (under 18). Assessed using the statutory pay reference period (maximum one month) and reckonable pay under the National Minimum Wage Act. ERO and SEO minimum rates may exceed the NMW in specific sectors. Official guidance
Net Pay. The amount paid to an employee after all deductions from gross pay; PAYE, USC, employee PRSI, pension and other authorised deductions.
NED (Non-Executive Director). A director performing duties solely in the capacity of director without an executive role. DSP Scope guidance indicates that a NED receiving fees solely for director duties is generally liable to self-employment contributions (Class S), not Class A. A separate employment relationship has its own separate insurability analysis.
NMW. See National Minimum Wage.
Non-Resident Employee. An employee who is not tax-resident in Ireland but performs duties for an Irish employer. Irish-source income is generally taxable in Ireland. A DTA may relieve some income from Irish tax. PRSI applies under domestic rules unless EU/EEA social-security coordination or a bilateral agreement determines otherwise. Important: different and stricter rules apply to directors of Irish-incorporated companies; directorship remuneration of an Irish company is generally subject to Irish Income Tax and USC regardless of the director’s residence or where duties are performed. PAYE should continue unless Revenue has accepted treaty relief and issued a PAYE Exclusion Order for that director. Do not cease PAYE on a non-resident director without first confirming the Revenue position.
Notional Pay. The monetary value attributed to a BIK added to an employee’s reckonable pay for PAYE, USC and PRSI calculations. The employee receives no cash but has higher statutory deductions as a result.
NTFL (National Training Fund Levy). A 1% charge included within the Class A and Class H employer PRSI rates. Not charged on top of the stated rates; the 11.25%/11.40% higher and 9.00%/9.15% lower rates for Class A already incorporate it.
O
Occupational Injuries Benefit. A DSP benefit for employees injured or made ill directly through work. Available from the first day of employment. Available to Class A and Class J contributors but not Class S.
Occupational Pension Scheme (OPS). A pension scheme established by an employer. Employer contributions to an approved OPS are generally exempt from employer PRSI. Employee contributions attract income tax relief at the marginal rate, within age-related limits and the €115,000 earnings cap.
Office Holder. A person appointed to a statutory or corporate office, including company directors. Under s.112 TCA 1997, office holders are treated as employees for income tax purposes. Office-holder income is subject to PAYE and USC regardless of PRSI class.
OMV (Original Market Value). The list price of a vehicle (including accessories and delivery) when first registered; used for company car BIK. 2026 OMV reductions: general €10,000; EV-specific €20,000. These reduce from 2027 (general €5,000; EV €10,000).
OWT Act (Organisation of Working Time Act 1997). Primary legislation governing working hours, rest, annual leave and public holidays. Sets the three methods for calculating annual leave and the 40-hour/5-week qualifying threshold for part-time public holiday entitlement.
P
P35. Annual employer return; abolished from 1 January 2019 under PAYE Modernisation. No longer exists. Official guidance
P45. Leaver form; abolished from 1 January 2019 under PAYE Modernisation. Official guidance
P60. Annual employee certificate; abolished from 1 January 2019 under PAYE Modernisation. Replaced by the Employment Detail Summary. Official guidance
Parent’s Benefit. A DSP benefit for parents for 9 weeks in the first 2 years after birth or adoption. Available to qualifying Class A and Class S contributors.
Paternity Benefit. A DSP benefit paid to a parent (other than the birth mother) for 2 weeks following birth or adoption. Available to qualifying Class A and Class S contributors.
PAYE (Pay As You Earn). The system by which income tax (and other deductions) is collected through the payroll by the employer on behalf of Revenue. Employers calculate and deduct income tax, USC and employee PRSI from gross pay on each pay date and remit to Revenue. Official guidance
PAYE Exclusion Order. A Revenue authorisation allowing an employer not to deduct Irish PAYE in specified circumstances, commonly involving employment duties abroad or certain treaty situations. It does not automatically establish exemption from PRSI. The exact order and Revenue rules should be checked before changing payroll.
PAYE Modernisation. The real-time payroll reporting system in force since 1 January 2019. Employers submit a PSR to Revenue on or before each pay date. Replaced the annual P35 and paper P45, P60 and P30 forms.
Pay Reference Period. The period selected by an employer for NMW compliance assessment; maximum one month.
Payslip. A written or electronic statement issued on each pay date showing gross pay, the nature and amount of each deduction, and net pay. A legal requirement under the Payment of Wages Act 1991, regardless of hours worked or earnings level.
PEPP (Pan-European Personal Pension Product). A portable personal pension product. Employer contributions to a PEPP are generally not subject to PAYE or PRSI subject to the applicable employer limit (broadly 100% of relevant emoluments from 1 January 2025).
Pension. An arrangement to save for retirement. Qualifying personal contributions to approved pension arrangements generally attract income tax relief within limits, but do not reduce USC or PRSI. My Future Fund operates under a separate State top-up model.
Personal Tax Credit. A basic Income Tax credit available according to the taxpayer’s personal and residence circumstances. The 2026 single-person credit is €2,000; the married/civil-partner credit is €4,000 where the relevant married/civil-partnership assessment conditions apply. Reduces Income Tax only; not USC or PRSI. Official guidance
PPSN (Personal Public Service Number). A unique reference number for specified public-service transactions in Ireland, including employment and tax. Required before an employer can retrieve a valid RPN. Adults can apply via MyWelfare.ie.
PRSA (Personal Retirement Savings Account). A pension product. Employer contributions are generally not subject to PAYE or PRSI, subject to the applicable employer limit from 1 January 2025.
PRSI (Pay-Related Social Insurance). Ireland’s social insurance system. Contributions fund Illness Benefit, Jobseeker’s Benefit, Maternity Benefit, Carer’s Benefit and the State Pension (Contributory). The PRSI class determines the contribution rate and benefits available.
PRSI Credit (Tapered PRSI Credit). Reduces employee PRSI for Class AX employees (€352.01–€424/week). Maximum credit: €12/week at €352.01, reducing by one-sixth of earnings above €352.01. No credit above €424.
PRSI Roadmap. A legislated schedule of phased PRSI rate changes, including the 1 October 2026 increase. Employers must apply the rates that are effective for each pay date and check the correct subclass instead of using one rate for the whole year. Official guidance
Proprietary Director. For Irish income tax, broadly a director who beneficially owns or controls more than 15% of the ordinary share capital. This is separate from the 50% or more ownership/control threshold relevant to the statutory Class S PRSI rule. Proprietary directors may have Form 11 and tax-credit restrictions.
PSA (PAYE Settlement Agreement). Allows an employer to settle PAYE, USC and PRSI on qualifying minor and irregular non-cash benefits in a single annual payment. Application must be received by Revenue on or before 31 December of the relevant tax year. Tax payment due within 23 days of year-end. Late payment makes the PSA null and void.
PSR (Payroll Submission Request). The digital submission filed on or before each pay date under PAYE Modernisation. Reports each employee’s gross pay, pay date, and amounts of PAYE, USC, employee PRSI and employer PRSI. Revenue uses PSR data to generate the monthly statement.
Public Holiday. Ireland has 10 public holidays per year. Full-time employees are entitled to public holiday benefits on all 10. Part-time employees qualify for each public holiday if they worked at least 40 hours in the 5 weeks immediately before the holiday. The employer chooses among four statutory options. An employee who works on the public holiday receives pay for working plus the public-holiday benefit. Official guidance
Q
Qualifying Disclosure. A disclosure of a tax default to Revenue that meets the detailed conditions in its Code of Practice. Depending on the circumstances, it can reduce penalties and offer protection from publication and prosecution for the matters disclosed. The outcome is not automatic.
R
RAC (Retirement Annuity Contract). A pension contract for self-employed persons and employees without occupational scheme access. Qualifying contributions attract income tax relief within age-related limits and the €115,000 cap. USC and PRSI are not reduced.
Reckonable Pay. The earnings on which PRSI is calculated; typically gross pay including notional pay/BIK. Qualifying share-based remuneration (where shares are in the employer or a controlling company) is generally excluded from employer PRSI reckonable pay. The NMW reckonable pay definition is set out under the National Minimum Wage Act.
Remote Working Daily Allowance. A tax-free payment of €3.20 per day to employees working from home on qualifying days. Must be reported via ERR on or before the payment date.
Revenue. The Irish Revenue Commissioners; the state body responsible for collecting PAYE, USC, employer PRSI, VAT and other taxes. Administers PAYE Modernisation, issues RPNs, generates monthly statements, and conducts compliance interventions. Not to be confused with HMRC (the UK tax authority).
Revenue Payroll Notification (RPN). A digital notification from Revenue containing the tax credits, standard rate cut-off point, and USC and LPT instructions for a specific employee. Employers must retrieve the latest RPN before each payroll run and apply it. Employers must not manually substitute different credits, rate bands or USC instructions for those supplied by Revenue via the RPN; if a credit appears incorrect, the employee must update Revenue via myAccount to trigger a new RPN.
ROS (Revenue Online Service). Revenue’s platform for employers, businesses and tax professionals. Used for PSR submissions, monthly statements, payroll file uploads, ERR reporting and Form 11 filing. Different from myAccount.
RPN. See Revenue Payroll Notification. Official guidance
RTSO (Relevant Tax on Share Options). The former employee payment mechanism for Income Tax on gains from exercising unapproved share options. For exercises on or after 1 January 2024, employers generally withhold Income Tax, USC and PRSI through payroll instead. Historic RTSO obligations can still be relevant to pre-2024 exercises.
S
SARP (Special Assignee Relief Programme). An income tax relief for qualifying employees assigned to Ireland. For employees arriving from 1 January 2026, minimum basic salary is €125,000, excluding bonuses and benefits. The relief can exempt 30% of qualifying employment income over the threshold, up to the €1 million cap. Employer certification is normally due within 90 days of arrival. For qualifying 2026 arrivals certified between days 91 and 180, relief begins the following year and can last up to four years. SARP does not reduce USC or PRSI. Official guidance
SBE (Small Benefit Exemption). An exemption allowing employers to provide up to five qualifying non-cash benefits per employee per year without PAYE, USC or PRSI, subject to a combined annual limit of €1,500. Where more than five benefits are provided, only the first five can qualify; the employer cannot retrospectively choose the five most favourable. A single benefit exceeding €1,500 is fully taxable (not just the excess). Cash payments do not qualify. Must be reported via ERR on or before the date of provision.
Scope Section. The unit within the Department of Social Protection with statutory authority to determine the correct PRSI class for a current/ongoing or ceased employment arrangement. A Scope Section determination is authoritative for the facts and period covered. The Scope Section cannot provide a formal determination on a proposed arrangement before employment commences.
Self-Assessment. The system by which self-employed persons and proprietary directors calculate and pay their own income tax via Form 11 via ROS.
Self-Correction. A mechanism under Revenue’s Code of Practice for correcting a tax default without penalty; subject to conditions: notification to Revenue in writing within the applicable time limit; correct tax and interest computed and paid; default must not be deliberate; and no Level 2/3 intervention issued for the relevant matters.
SEO (Sectoral Employment Order). A legal instrument setting minimum pay, pension and sick-pay conditions for specific sectors; similar to an ERO. The 2024 Sectoral Employment Order for the construction industry sets minimum conditions for craft workers, general operatives and apprentices.
Share Schemes. Arrangements allowing employees to acquire shares. Annual Revenue returns are required as applicable for the scheme/event: ESA (RSUs and various share awards), RSS1 (unapproved share options), KEEP1 (KEEP options), ESS1 (Approved Profit Sharing Schemes), SRSO1 (Sharesave), ESOT1 (Employee Share Ownership Trusts). General annual deadline: 31 March following the tax year. Employer PRSI generally does not apply to qualifying share-based remuneration where shares are in the employer or a controlling company; cash-settled awards are subject to employer PRSI.
Social Insurance Fund. The fund into which PRSI contributions are paid and from which social welfare payments are made.
SRCOP (Standard Rate Cut-Off Point). The income threshold below which Income Tax is 20% and above which it is 40%. Set in the RPN. 2026: single person €44,000; single parent €48,000; married one income €53,000; married two incomes up to €88,000 (subject to individual limits). The SRCOP is an income tax concept; USC and PRSI have their own separate band structures. Official guidance
SRSO1. Annual employer return for Approved Save As You Earn (Sharesave) schemes. General deadline: 31 March following the tax year.
SSP (Statutory Sick Pay). A statutory entitlement under the Sick Leave Act 2022. In 2026: 5 days per calendar year; 13 weeks’ continuous service required; 70% of the normal daily wage, capped at €110/day; applies to days the employee is ordinarily scheduled to work; subject to medical-certification requirements. The planned increase to 7 days was paused by the Government in April 2025; check the latest official guidance. Official guidance
State Pension (Contributory). A State pension based on a qualifying PRSI record. The standard claiming age is 66, while eligible people born on or after 1 January 1958 may defer claiming up to age 70. Assessment methods and rates depend on the claimant’s contribution record and the applicable rules.
Subsidiary Employment. A secondary employment where the employee’s primary employment is elsewhere. Employees in subsidiary employment may be Class J regardless of weekly earnings from the subsidiary employer. Verify with the DSP Scope Section where uncertain.
T
Tax Credits. Fixed euro amounts that reduce an employee’s Income Tax liability. Each euro of credit saves exactly one euro of Income Tax; credits do not reduce USC or PRSI. Credits are set by Revenue and communicated via the RPN. 2026 main credits: Personal Tax Credit, Employee (PAYE) Tax Credit (up to €2,000), Earned Income Credit (up to €2,000).
Tax Defaulters List. Revenue’s quarterly published list of tax settlements above certain thresholds. An accepted qualifying disclosure is excluded from publication. Current Code exclusions: accepted qualifying disclosures; tax-only settlements not exceeding €50,000; penalty not exceeding 15% of additional tax due.
Taxable Pay (PAYE). The income on which PAYE is calculated; cash gross pay less qualifying pre-tax pension contributions, where applicable. Notional pay (BIK) is generally included. USC and PRSI each have their own bases, which may differ.
Travel and Subsistence. Where qualifying, payments can be made tax-free using civil service rates as a benchmark, but the underlying journey must satisfy Revenue’s qualifying conditions. All qualifying tax-free payments must be reported via ERR.
Treatment Benefit. A DSP benefit providing dental and optical services to qualifying PRSI contributors. Available to Class A and Class S contributors.
U
USC (Universal Social Charge). A tax on gross income applied at separate bands with no credits. 2026 bands: 0.5% on the first €12,012; 2% on €12,013–€28,700; 3% on €28,701–€70,044; 8% above €70,044. Exempt where total annual income is €13,000 or less (all-or-nothing threshold; once exceeded, USC applies from the first euro). Reduced rates: where total income is €60,000 or less and the individual is either aged 70 or over OR holds a full Medical Card (a GP visit card does not qualify), the reduced USC rates apply; 0.5% on the first €12,012 and 2% on the balance. USC applies to gross pay including BIK/notional pay. Qualifying pension contributions do not reduce the USC base. Official guidance
V
Voluntary Contributions (PRSI). Contributions to maintain a PRSI record after non-insurable activity. Must be applied for within 60 months of the end of the contribution year in which PRSI was last paid or credited. Annual minimums: former Class A/E/H contributors €500; Class B/C/D €250; Class S €650.
W
Week 1/Month 1 (W1/M1) Basis. A non-cumulative tax basis instructed by Revenue via the RPN. Only the current period’s credits and standard rate band are applied; year-to-date figures are not accumulated. W1/M1 is a valid Revenue instruction; it is not automatically a sign of an error. Employers must operate the basis shown on the current RPN.
Working Week (Annual Leave). For annual leave, the number of days the employee normally works in a week; not a fixed five-day week. A part-time employee working 3 days per week has a 3-day working week. Their 4-working-weeks maximum entitlement is 12 days, not 20.
WRC (Workplace Relations Commission). The statutory body resolving employment disputes, inspecting for employment-law compliance, and issuing codes of practice. Key areas: NMW, working time, employment rights enforcement.
Y
Year-End (Payroll). 31 December; key payroll control point. Main tasks: BIK reconciliation; ERR completeness; PRSI class review; PSA application by 31 December; final PSR on or before the actual December pay date; December monthly statement review by 14 January; December liability by 23 January (ROS). No P35 equivalent under PAYE Modernisation.
Z
Zero-Hours Contract. An employment arrangement with no guaranteed working hours. Most such contracts are restricted in Ireland, subject to statutory exceptions for genuine casual work, emergency circumstances and short-term relief. Related minimum-payment and banded-hours protections may apply.
2026 Payroll Figures at a Glance
The figures below are for 2026. PRSI rates depend on subclass and payment date, while tax bands and credits depend on individual circumstances.
| Item | 2026 position |
|---|---|
| Income tax | 20% standard rate; 40% higher rate |
| Single-person standard-rate band | €44,000 |
| Single-person personal tax credit | €2,000 |
| USC | 0.5% first €12,012; 2% next €16,688; 3% next €41,344; 8% remainder |
| Class A employee PRSI | 4.20% to 30 September; 4.35% from 1 October (where payable) |
| Class A employer PRSI: A0 | 9.00% throughout 2026 |
| Class A employer PRSI: AX and AL | 9.00% to 30 September; 9.15% from 1 October |
| Class A employer PRSI: A1 | 11.25% to 30 September; 11.40% from 1 October |
| Minimum wage, age 20+ | €14.15 per hour |
| Statutory sick pay | Five eligible days; 70% normal daily pay, capped at €110 per dayFive eligible days; 70% normal daily pay, capped at €110 per day |
| My Future Fund | Initial employee and employer contributions 1.5% each |
For the underlying figures, see Revenue’s 2026 tax bands, USC thresholds and DSP’s PRSI subclass table.
These definitions are general information, not individual tax, payroll or legal advice. Payrollcompany.ie is operated by Forti Ltd., Sandyford, Dublin 18.
