Payroll in Ireland: Understanding a complex and evolving landscape
Payroll is a very sensitive area and it's important that employees feel that their requirements are dealt with appropriately. Payroll in Ireland has undergone significant change in recent years, with new rules, expanded reporting obligations and increased scrutiny from Revenue.
The Irish payroll environment has unique requirements compared with many other jurisdictions, including:
Real‑time reporting
Prior to real time reporting in Ireland, you didn't have to necessarily submit and report to Revenue in terms of expenses, benefits and bonuses.
There are a number of ways to submit payroll details to Revenue in real-time. Direct payroll reporting lets your payroll software automatically send payroll information to ROS. The other option is to manually enter payroll details using Revenue's online form.
Specific rules for certain benefits
In Ireland, Benefit-in-Kind (BIK) refers to non-cash perks (cars, insurance, etc.), and they are considered taxable income, subjected to PAYE, USC, and PRSI. Health insurance premiums paid by employers are taxable BIK on the gross premium, though tax relief (TRS) applies. Employers can also provide tax-free benefits up to €1,500 via 5 vouchers.
Stock options, RSUs and share schemes
Stock options and Restricted Stock Units (RSUs) are taxed as employment income (PAYE, USC, PRSI) upon vesting or exercise, based on the share's fair market value (FMV). RSUs are taxed immediately upon settlement, while stock options are taxed when exercised. Revenue-approved schemes (e.g., APSS, SAYE) may offer tax exemptions.
Local or industry-specific reporting and approval requirements
As an example, construction-specific payroll benefits in Ireland are heavily governed by Sectoral Employment Orders (SEOs), mandating minimum hourly rates, specific pension contributions, and sick pay through the Construction Workers' Sick Pay Trust (CWSPT), which offers superior terms to the statutory scheme. These often include mandatory death-in-service benefits and tax-efficient travel/subsistence allowances (country money).
Auto-enrolment
Auto-enrolment retirement savings scheme, called My Future Fund, launched on the 1st of January 2026. This new pension savings scheme is designed for employees who are not currently contributing to a pension. Under the scheme, the employee, employer, and Government all pay a certain amount into the employee’s pension fund.
These rules require timely, accurate submission to Revenue, often on the same day payments or benefits are provided.
Supporting employers entering the Irish market
Many UK‑based companies set up branches or subsidiaries in Ireland. A key first step is identifying the correct structure:
- Employer registration only, where employees are present in Ireland but the organisation is not trading
- Permanent establishment, which triggers wider tax obligations such as corporation tax, VAT and relevant contract tax
When a company enters the Irish market there are multiple steps their payroll team should handle.
- Register them as an employer in Ireland
- Take them through the process of setting up all of their tax credits for their employees
- Understand the policies that that client has and what benefits they offer to their employees, like pensions or health insurance. Ensuring that that's all returned correctly to Revenue is essential
End‑to‑end payroll lifecycle support
The ideal partner for companies establishing an Irish presence provides a full‑service payroll solution supported by tax specialists, from initial setup through to annual reporting, ensuring organisations meet all Revenue requirements and maintain full compliance as they grow.
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