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Running Payroll in Ireland: A Complete Guide for Employers

Running payroll in Ireland is a sequence of linked obligations rather than a single calculation. You need the right employer registration, the correct employee information, a current Revenue Payroll Notification, accurate gross pay, the right tax and social-insurance deductions, a payslip, and a payroll submission to Revenue on or before the pay date. Since 2026, employers can also have a separate MyFutureFund contribution workflow, while Enhanced Reporting Requirements can apply to certain non-taxable payments and benefits.

This guide takes you through the main stages of running payroll in Ireland, from employer registration and employee setup to RPNs, payroll calculations, Revenue reporting and records.

Monthly Payroll — By Headcount

1-9 employees

€30 / employee

10-20 employees

€25 / employee

21+ employees

Custom quote

payroll works

How payroll works in Ireland

For most employers, the recurring payroll cycle looks like this:

confirm who’s an employee

Before payroll begins, confirm who is actually an employee

Payroll starts with employment status. A person who is an employee for tax purposes belongs within PAYE. A genuinely self-employed contractor is treated differently. The label used in a contract or invoice does not decide the issue by itself.

Revenue applies the Supreme Court Karshan five-step framework when distinguishing a contract of service from a contract for service. Businesses should review the real working arrangement, including personal service, control and the overall facts.

Construction employers, take note

If a worker has been treated as self-employed but the facts point to employment, the business can have PAYE obligations. Construction employers should be especially careful not to assume that RCT treatment, by itself, proves self-employed status.

Step 1

Register as an employer with Revenue

If you hire an employee, you must register as an employer. Revenue says the registration should be completed before you make the first payment to the employee.

The current registration route depends on the type of entity and whether a tax agent acts for the business. Online eRegistration through ROS is used where available. Revenue also provides forms such as TR1, TR1 (FT), TR2 and TR2 (FT) where the paper route applies.

Directors can trigger employer registration

A company must register as an employer and operate PAYE on director income even if there are no other employees. Revenue’s general rule also brings the income of directors of Irish-incorporated companies within PAYE regardless of the director’s residence or where the duties are performed. Cross-border and treaty situations can require additional analysis, so complex cases should be checked separately rather than reduced to a one-line payroll rule.

Our Director Payroll in Ireland guide →

Step 2

Set up each employee correctly

A clean employee record prevents many of the problems that later appear as emergency tax, duplicate employments or mismatched Revenue records.

Before the first pay run, collect and verify the information you genuinely need for payroll, including:

First employment in Ireland versus a later job

A first job in the State is treated differently from a subsequent job. If it is the employee’s first employment in Ireland, the employee registers the job through Revenue’s Jobs and Pensions service in myAccount. For later employments, the employer registers the new employment by requesting an RPN with the correct start date.

Our Revenue Payroll Notification guide →

Step 3

Request the latest Revenue Payroll Notification

Before payroll is run, the employer must request the latest RPN for each employee. The RPN is Revenue’s instruction for calculating the employee’s Income Tax and USC and, where relevant, Local Property Tax deducted through payroll.

An RPN can include the employee’s total tax credits, Income Tax cut-off point, USC cut-off points or exemption, tax basis, previous pay and tax information in relevant cases, LPT instruction, Employment Identifier, issue date and unique RPN number.

The employer applies the RPN returned by Revenue. It should not manually increase credits, move rate bands between jobs or switch an employee from Week 1 to cumulative treatment because the employee expects a different net figure.

What if no RPN is available?

Emergency basis applies when no usable RPN is available. In 2026, where the employee has supplied a PPSN, emergency Income Tax allows the standard rate band for the first four weeks but no tax credits. From week five, all pay is taxed at the higher Income Tax rate. Where there is no PPSN, the higher rate applies from the outset. Emergency USC also applies.

When Revenue later makes an RPN available, payroll follows the new RPN. A cumulative RPN can produce a refund of overpaid Income Tax and USC through payroll. A Week 1 or Month 1 RPN cannot generate that refund until Revenue issues a cumulative RPN.

Our RPN employer guide →

Step 4

Confirm gross pay before calculating deductions

Gross pay is the starting point. It can include basic salary or wages, overtime, commission, bonuses, certain allowances, taxable expenses and the taxable value of benefits in kind. The calculation only works if the underlying pay inputs are correct.

National minimum wage

From 1 January 2026, the national minimum wage for an employee aged 20 or over is €14.15 per hour. Lower age-based statutory rates apply to younger workers. Sectoral Employment Orders and Employment Regulation Orders can set higher minimum rates or additional conditions for particular sectors.

Age	Minimum Hourly Rate from 1 January 2026
20 and over	€14.15
19	€12.74
18	€11.32
Under 18	€9.91

Tips and gratuities paid through a central fund do not count as reckonable pay for National Minimum Wage purposes. Employers should also check sector-specific statutory rates where an SEO or ERO applies.

Hours, leave and public holidays

Payroll needs accurate information about the hours and days for which the employee is entitled to be paid. Employment-law calculations are not replaced by payroll software. Where the input is wrong, payroll can calculate the wrong result perfectly.

Most employees accrue statutory annual leave from the start of employment. Ireland also has ten public holidays. Full-time employees have an immediate entitlement to the statutory public-holiday benefit, while part-time employees qualify when they have worked at least 40 hours in the previous five weeks. The employer chooses the form of public-holiday benefit from the statutory options, and the calculation depends on the employee’s work pattern.

Statutory sick leave

The statutory sick-leave entitlement remains five days per calendar year. Subject to the statutory conditions, including at least 13 weeks’ continuous service and medical certification, the rate is 70% of usual daily earnings up to €110 per day. Earlier plans to increase the entitlement to ten days by 2026 were not implemented.

Benefit in kind and notional pay

A non-cash benefit with monetary value can be taxable as benefit in kind (BIK). Common examples include private use of an employer-provided car, employer-paid medical insurance, accommodation and preferential loans. Revenue generally requires Income Tax, PRSI and USC to be operated on the taxable value through payroll.

Notional pay should be reported through payroll in the period required by Revenue. Where the actual value is not yet available, Revenue allows a best estimate, followed by an adjustment when the correct value is known. Vehicle BIK has its own detailed valuation rules, so employers should not use a generic percentage without checking the current Revenue tables.

Step 5

Calculate Income Tax, USC and PRSI

The main statutory payroll deductions are Income Tax under PAYE, USC and employee PRSI. Employer PRSI is an additional employer cost. Local Property Tax can also be deducted where the RPN instructs payroll to do so.

Income Tax under PAYE

Income Tax is charged at the standard rate of 20% up to the employee’s applicable rate band and at 40% above it. The exact rate band and tax credits used for payroll come from the RPN, not from a generic table. For example, the 2026 standard rate band for a single person without qualifying children is €44,000, but married couples and other circumstances can have different bands.

Universal Social Charge

If an individual’s total income is no more than the USC exemption threshold, USC does not apply. For 2026, that threshold is €13,000. Once income exceeds the exemption threshold, USC is charged on the full income using the applicable bands, subject to any reduced-rate or other special treatment shown through Revenue.

2026 Standard USC Band	Rate
First €12,012	0.5%
Next €16,688	2%
Next €41,344	3%
Balance	8%

PRSI

PRSI depends on the employee’s contribution class and earnings the Department of Social Protection, not the RPN, is the authority for PRSI classes and rates. For standard Class A employment, the employee rate is generally 4.2% up to 30 September 2026 and 4.35% from 1 October 2026 once the relevant earnings threshold is exceeded, with a PRSI credit operating in part of the lower earnings range. The employer rate is generally 9% or 11.25% up to 30 September 2026 depending on weekly earnings, increasing to 9.15% or 11.40% from 1 October 2026. Different contribution classes have different rules.

Do not guess a director's PRSI class

A proprietary director who owns or controls 50% or more of a company, directly or indirectly, is classified as self-employed for PRSI at Class S under Department of Social Protection guidance. Below that threshold, classification can depend on the facts. Class S is 4.2% until 30 September 2026 and 4.35% from 1 October 2026, subject to the applicable minimum contribution rules, and there is no employer Class S contribution.The 50% PRSI rule is separate from Revenue’s more-than-15% proprietary-director test used for certain Income Tax rules. See the Director Payroll in Ireland guide before applying a director classification.

Other deductions from pay

PAYE and PRSI are deductions authorised by law. Other deductions can require a contractual basis or the employee’s written agreement. Examples can include pension contributions, health-insurance subscriptions or other agreed deductions. The Payment of Wages rules should be checked before making deductions that are not statutory.

Step 6

Report payroll to Revenue on or before the pay date

Employers must report payroll information to Revenue on or before the day the employee is paid. The current term is simply a payroll submission. The older phrase Payroll Submission Request, or PSR, should not be used as the primary current name.

A payroll submission includes the employee and employment identifiers, pay date, pay and statutory deduction information, PRSI details, and the RPN number used where an RPN applies. Payroll software can submit the information electronically, but Revenue also provides ROS facilities for employers that do not use payroll software.

PAYE works on the payment date

PAYE operates on a receipts basis. If an employee earns overtime in December but is paid for it in January, the payment belongs in the January payroll submission. The pay date, not the date the work was performed, determines the payroll reporting period.

If the submission is wrong

Payroll submissions can be corrected through payroll software or ROS. Corrections should be made through the payroll record and Revenue reporting process rather than by making an informal net adjustment that leaves the payslip and Revenue data out of step.

Step 7

Give the employee a payslip and pay net wages

Every employee must receive a written statement of wages with every wage payment. The payslip must show gross wages and itemise the nature and amount of each deduction. If wages are paid by credit transfer, the statement should be provided as soon as possible after the transfer.

Two separate obligations

The net-pay payment and the Revenue reporting obligation are linked but separate. A successful bank payment does not replace the payroll submission, and a payroll submission does not itself transfer net wages to the employee.

Step 8

Reconcile the Revenue monthly statement and pay the liability

Real-time payroll reporting happens on each pay date, but the employer also has a monthly Revenue cycle. Revenue generates a statement from the payroll submissions, and the employer should review it before it becomes the statutory return.

Timing	Revenue Employer Cycle
By the 5th of the Following Month	Revenue makes the monthly statement available.
By the 14th	Review and, where necessary, correct payroll submissions. If no action is taken, Revenue deems the statement to be the monthly return on the 14th.
Payment Date	Monthly remitters generally pay by the 14th, extended to the 23rd for ROS users who file and pay online. Quarterly and annual remitters have different payment frequencies, although the monthly statement still becomes a monthly return.

Employers should check their remitter status rather than assuming every business pays monthly.

Pensions

MyFutureFund adds a separate pension contribution process

MyFutureFund, Ireland’s automatic-enrolment retirement savings system, has been live since 1 January 2026. NAERSA identifies and enrols employees who meet the statutory conditions. The employer and payroll provider do not make the eligibility determination themselves.

Broadly, automatic enrolment applies to employees aged at least 23 and under 60 whose combined gross pay across employments exceeds €20,000 a year and who are not already covered by qualifying pension contributions through payroll. The detailed assessment is carried out centrally using payroll information.

For 2026 to 2028, the employee contribution is 1.5% of gross pay, matched by a 1.5% employer contribution, with a 0.5% State contribution. The rates are scheduled to rise in later phases.

Where payroll software or file-based submission is used, the current Automatic Enrolment Payroll Notification (AEPN) forms part of the payroll workflow. Manual portal submission operates differently. Contribution submissions and payments are due by 18:30 on the employee’s pay date.

The pension exemption rules, opt-out process, contribution cap and AEPN workflow are covered in our MyFutureFund Employer Guide.

Reporting

Enhanced Reporting Requirements sit alongside payroll

ERR is separate from the ordinary payroll submission. Since 1 January 2024, employers have had to report specified expenses and benefits to Revenue on or before the relevant payment or provision date. The current categories are the Small Benefit Exemption, the Remote Working Daily Allowance, and Travel and Subsistence each with its own data fields and conditions.

Non-taxable doesn't mean non-reportable

The fact that a payment is non-taxable does not automatically mean it falls outside reporting. See the Enhanced Reporting Requirements guide for the eight travel and subsistence subcategories, small-benefit rules and records requirements.

Directors

Payroll for directors needs separate checks

Directors are paid through PAYE, but several director-specific rules can change the result. A company should establish the director’s PRSI position, whether they’re a proprietary director for Income Tax purposes, whether a Form 11 obligation applies, and whether any cross-border or BIK issues need specialist treatment.

Two different ownership tests

Don’t use a single ownership percentage for every director question. The 50%-or-more ownership/control test is relevant to Class S PRSI under DSP guidance. Revenue’s proprietary-director definition for the Employee Tax Credit uses a separate more-than-15% control test these rules answer different questions.

Proprietary directors are within self-assessment and generally file a Form 11 even where salary has already been taxed through PAYE. Payroll and the director’s personal tax-return obligations should be treated as connected but separate processes.

Pay cycle

Weekly, fortnightly or monthly payroll

Irish employers can use different pay frequencies. The best choice depends on contracts, working patterns and what the business can operate consistently.

Pay Frequency	Typical Fit	Operational Consideration
Weekly	Hourly-paid teams and businesses with frequent changes in hours	More pay runs, more RPN retrievals, more payslips and more payroll-submission events.
Fortnightly	Teams that need relatively frequent pay without a weekly run	Reduces processing events compared with weekly payroll while remaining responsive to variable hours.
Four-weekly	Some organisations and payroll arrangements	Thirteen regular pay runs can occur in a tax year, so budgeting and tax-credit periods need to be handled correctly.
Monthly	Salaried or relatively stable teams	Fewer payroll runs, but cut-off dates need to capture all changes before the monthly pay date.

Whichever cycle you choose, Revenue reporting is tied to the actual pay date. A weekly employer therefore has more reporting events than a monthly employer, but the core legal rule is the same.

Employment lifecycle

Starters, leavers and changes during employment

Payroll records need to follow the employment as it changes. New starters, employees who leave, career breaks, changes in pay and later payments all need to be reflected in the payroll information reported to Revenue.

When an employee starts

For a person who has already worked in the State, the employer normally notifies Revenue of the new employment through the payroll process. The commencement date and Employment Identifier should be correct from the outset. If it is the person’s first employment in the State, they register that first job through myAccount before Revenue can make the RPN available.

Changes to pay during employment

Salary increases, overtime, commission, bonuses, unpaid leave and benefit changes all affect gross-to-net pay. The employer should have a clear cut-off and approval process so payroll receives the change before the pay run is finalised. Where Revenue information changes, payroll should retrieve and use the updated RPN rather than attempting to recreate the employee’s tax position internally.

When an employee leaves

The employer includes the date of leaving on the final payroll submission. Revenue uses that cessation information to close the employment and to help ensure that a later employer receives the correct tax information. A career break and a death in service are also treated as cessations for this reporting purpose.

If a payment is made after the employee has left, it still belongs in payroll. Revenue has different RPN steps depending on whether the post-cessation payment is made in the same tax year or a later tax year. The original Employment Identifier and cessation date remain relevant, so a later payment should not be treated as a completely unrelated new employment.

Year end

The end of the tax year and the first payroll of January

The payroll calendar resets on 1 January. A payment made in the new year uses the new year’s RPN and rates even if the work was performed in December. Revenue makes RPNs available in December for the coming year and updates them as information changes.

Employers should request current-year RPNs for the first payroll of the year and must not carry a prior-year RPN into a new-year payment. The Employment Identifier should remain unchanged where the employment itself is continuous across the year end.

Employees no longer rely on an employer-issued annual P60 for the modern PAYE process. Revenue makes an Employment Detail Summary available to the employee through myAccount, based on the payroll information reported during the year. Accurate real-time submissions therefore feed directly into the employee’s year-end Revenue record.

January is also a good control point for reviewing tax-year rates, USC bands, PRSI changes, minimum wage, MyFutureFund contribution rates and any sector-specific statutory pay rules before the first run is approved.

Process design

Payroll controls that reduce avoidable errors

Most payroll failures are not caused by an obscure calculation. They start with an input, timing or approval problem. A short control routine can prevent the same issue from repeating across every pay cycle.

Compliance

Payroll records and retention

Revenue tax records generally need to be retained for six years after the end of the tax year to which they relate. Employment-law records can have different retention periods, so a six-year payroll archive should not be treated as the only record-keeping rule the employer has.

A practical payroll file should allow you to reconstruct how each payment was calculated. Depending on the business, keep:

For statutory sick leave, WRC guidance currently requires specific records to be kept for four years. National Minimum Wage records are generally kept for three years. Record-retention periods therefore depend on the legal obligation involved.

WHAT GOES WRONG

Common payroll mistakes Irish employers can prevent

Paying before employer registration is in place.

Revenue expects employer registration before payment to employees.

Using old RPN data.

The latest RPN must be requested before payroll. An employee’s credits or tax basis can change between pay runs.

Using PSR as if it is the current statutory term.

Use payroll submission. Clear terminology reduces confusion between the submission and Revenue’s later monthly statement.

Treating the work date as the payroll tax date.

PAYE reporting follows the date the employee is actually paid.

Guessing PRSI class.

PRSI classification is not determined by the RPN, job title or a convenient payroll setting.

Using one director ownership threshold for every rule.

Class S PRSI and proprietary-director Income Tax rules use different tests.

Ignoring BIK until year end.

Taxable benefits should be brought through payroll as notional pay in line with Revenue’s reporting rules.

Assuming non-taxable expenses never need reporting.

ERR can apply even though the underlying payment is tax-free.

Determining MyFutureFund eligibility locally.

NAERSA identifies and enrols eligible employees. Payroll follows the official enrolment information.

Missing the Revenue monthly review.

The monthly statement becomes the statutory return if no action is taken by the 14th.

Making an off-payroll correction.

Correct the payroll and submission rather than compensating an employee with an unexplained net adjustment.

Assuming outsourcing transfers legal responsibility.

Revenue states that the employer remains responsible for payroll compliance whether using software, a payroll company, another agency or ROS.

Choosing a route

Running payroll yourself or outsourcing it

There is no rule requiring every Irish employer to use payroll software or an outsourced provider. Revenue allows payroll information to be reported through ROS, and a very small, stable payroll can be managed internally if the employer has the time and knowledge to operate it correctly.

Area	Internal Payroll	Outsourced Payroll
Payroll Inputs	The employer gathers, checks and enters them.	The employer still supplies and approves accurate inputs.
RPN and Revenue Submissions	Handled internally through software or ROS.	Processed by the payroll provider within the agreed service scope.
Employee Queries	Handled by the internal payroll contact.	Can be supported by a specialist payroll contact, depending on the service.
Compliance Responsibility	Remains with the employer.	Revenue confirms that outsourcing does not transfer the employer's statutory responsibility.
Scalability	Depends on internal capacity and expertise.	Can reduce the operational workload as headcount or payroll complexity grows.

Complexity increases quickly when you add variable hours, weekly pay, frequent starters and leavers, directors, BIK, multiple employments, cross-border staff, pension contributions, MyFutureFund, ERR or sector-specific wage rules.

Ready to run

Payroll setup checklist for an Irish employer

Every one of these should be in place at the right stage of the payroll cycle.

Frequently asked questions

Common questions about Running Payroll

Do I need to register as an employer before the first payroll?

Yes. Revenue says an employer should register before paying an employee. A company must also register and operate PAYE on director income even if it has no other employees.

Do I need payroll software in Ireland?

No. Revenue provides ROS facilities for payroll reporting. Software can automate RPN retrieval, calculations and submissions and is often more practical as the payroll grows.

What is an RPN?

A Revenue Payroll Notification is the employer-facing Revenue instruction used for an employee’s current Income Tax, USC and, where relevant, LPT treatment. The latest RPN should be requested before payroll.

What happens when there is no RPN?

Emergency Income Tax and USC rules apply. The detailed treatment depends on whether the employee has supplied a PPSN and how long the emergency period has lasted.

When must payroll be reported to Revenue?

On or before the employee’s pay date. PAYE reporting follows when the employee is paid, not when the work was carried out.

Is a Payroll Submission Request still the right term?

Revenue’s current terminology is payroll submission. If you come across ‘Payroll Submission Request’ or ‘PSR’ in older material, it refers to earlier terminology.

What deductions normally come from an employee's pay?

Income Tax, USC and employee PRSI are the main statutory deductions. LPT can also be deducted where Revenue instructs it. Pension, MyFutureFund and other lawful deductions can apply depending on the employee and employment.

What does an employer pay on top of salary?

Employer PRSI is the main payroll tax cost for ordinary Class A employment. Employers can also have pension or MyFutureFund contributions and other employment costs. The rate depends on the relevant PRSI class and earnings.

How much is the national minimum wage in 2026?

From 1 January 2026, the national minimum wage for age 20 and over is €14.15 per hour. Lower statutory rates apply at ages 19, 18 and under 18. Some sectors have higher statutory minimum rates under an ERO or SEO.

Do tips count towards the national minimum wage?

Tips or gratuities paid into a central fund and through payroll are not reckonable components for National Minimum Wage purposes. Employers also cannot use tips to make up contractual rates of pay.

What is MyFutureFund?

MyFutureFund is Ireland’s automatic-enrolment retirement savings system. NAERSA identifies and enrols eligible employees. Payroll then follows the official contribution and notification process.

Does every employer decide which employees go into MyFutureFund?

No. NAERSA performs the eligibility and enrolment process using payroll information. Employers should not recreate that determination themselves.

What is ERR?

Enhanced Reporting Requirements require specified non-taxable expenses and benefits to be reported to Revenue on or before the payment or provision date. The current categories include the Small Benefit Exemption, Remote Working Daily Allowance and Travel and Subsistence.

Do company directors go through payroll?

Yes. PAYE applies to directors. Director PRSI, proprietary-director self-assessment and cross-border questions can require separate checks.

How long should payroll records be kept?

Revenue tax records generally need to be kept for six years after the end of the relevant tax year. Employment-law records can have different retention periods, so employers should keep a record-retention schedule that covers each obligation.

Can I correct a payroll mistake after filing?

Yes. Revenue allows payroll submissions to be corrected through payroll software or ROS. The correction should be made through payroll so Revenue records and the employee’s payslip remain aligned.

Does outsourcing payroll transfer the employer's legal responsibility?

No. Revenue expressly says the employer remains responsible for ensuring payroll compliance whether payroll is run through software, a payroll company, another agency or ROS.