Employer of Record in Ireland

Hiring talent in Ireland opens access to a skilled workforce and a strategic gateway to the European market. However, navigating Irish employment law, payroll, and compliance requirements can be complex, particularly for companies without a local legal entity. Understanding your options for engaging employees is crucial for a successful expansion.

Companies looking to hire in Ireland generally have a few primary avenues for employment:

• Establishing a local entity: This involves setting up a subsidiary or branch office in Ireland, which requires significant time, investment, and ongoing administrative effort to manage local registration, tax, and employment compliance.
• Utilizing an Employer of Record (EOR): An EOR, such as Rivermate, legally employs your staff on your behalf, handling all local employment responsibilities while you retain full control over day-to-day management.
• Engaging independent contractors: While seemingly straightforward, classifying workers as independent contractors in Ireland carries strict criteria. Misclassification can lead to significant penalties for the hiring company, including back taxes, social contributions, and fines.

How an EOR Works in Ireland

An Employer of Record simplifies global expansion by acting as the legal employer for your team in Ireland. This means the EOR assumes all the legal and administrative burdens associated with local employment, allowing your company to focus on its core business objectives. Specifically, an EOR in Ireland will handle:

• Payroll processing: Ensuring accurate and timely payment in line with Irish tax and social security regulations.
• Tax withholdings and filings: Managing PAYE (Pay As You Earn) income tax, PRSI (Pay Related Social Insurance), and USC (Universal Social Charge).
• Employment contracts: Drafting and managing compliant employment agreements that adhere to Irish labor laws.
• Employee benefits administration: Offering and administering statutory and often supplemental benefits, such as pension contributions and health insurance.
• Compliance with Irish labor laws: Staying up-to-date with changes in legislation regarding working hours, holidays, leave, and termination procedures.
• HR support: Providing guidance on local HR best practices and managing employee relations in accordance with Irish law.

Benefits for Companies Hiring in Ireland Without a Local Entity

Choosing an EOR service offers substantial advantages for businesses aiming to expand into Ireland quickly and compliantly:

• Rapid market entry: Bypass the lengthy and complex process of establishing a legal entity, allowing you to hire and onboard employees in Ireland much faster.
• Reduced compliance risk: Mitigate the risks associated with navigating unfamiliar Irish employment laws, tax regulations, and payroll obligations.
• Cost efficiency: Avoid the significant upfront and ongoing costs of setting up and maintaining a local subsidiary.
• Access to talent: Recruit top talent in Ireland without the administrative overhead typically required for international hiring.
• Flexibility: Test new markets or manage temporary projects in Ireland without a long-term commitment to a local entity.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Ireland includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Ireland.

Employers in Ireland must operate the PAYE system, deducting income tax, PRSI, and USC from employees' wages and remitting these to Revenue monthly. Employer PRSI contributions vary by earnings: 0.5% for weekly gross earnings up to €441.99, and 11.05% for €442.00 or more, based on PRSI Class A. Income tax withholding depends on individual employee circumstances, including tax credits and standard rate cut-off points, with the PAYE system calculating deductions accordingly.

Employees benefit from various tax deductions such as pension contributions, medical insurance, and tuition fees, which can reduce taxable income. USC rates are progressive, ranging from 0.5% for income up to €12,012 to 8% for income above €70,044. Employers must report PAYE data in real-time, remit taxes by the 14th of the following month (or 23rd online), and file annual returns, including P11D forms for benefits in kind. Non-compliance risks penalties.

Foreign companies and workers face additional considerations, including residence status, tax treaties, and relief programs like SARP and KEEP. Foreign entities may create permanent establishments subject to Irish corporation tax, and VAT obligations may also apply depending on business activities.

Ireland's compensation landscape in 2025 is shaped by a strong economy, with salary levels varying significantly across industries and roles. High-demand sectors such as technology, finance, and pharmaceuticals offer higher salaries, e.g., Software Engineers earn between €60,000 and €100,000+, while roles like Customer Service Representatives typically earn €30,000 to €45,000. Employers should conduct market research to align salaries with industry standards.

The national minimum wage as of 2025 is €13.10/hour for adults (20+), with lower rates for younger employees. Employers must comply with minimum wage laws and employment regulations covering working hours, rest periods, and benefits. Compensation packages often include bonuses (performance, sign-on), allowances (relocation, remote work), health insurance, pension contributions, and company cars, varying by industry and company size.

Payroll is generally processed monthly via direct bank transfer, with payslips detailing gross pay, deductions, and net salary. Salary trends indicate continued growth driven by demand for skilled workers, inflation, and evolving employee expectations around work-life balance and diversity. Staying informed on these trends is essential for competitiveness.

Irish employment law mandates minimum leave entitlements, including annual leave, public holidays, sick leave, and parental leave, with employers free to offer more generous policies. Employees are entitled to at least 4 working weeks of paid annual leave per year, calculated based on hours worked (e.g., 8% of annual hours or 1/3 of a week per month with 117+ hours). Leave must generally be taken within the leave year, which often aligns with the calendar year.

Public holidays in Ireland include ten days such as New Year's Day, St. Patrick's Day, and Christmas, with employees entitled to paid leave or compensatory time if required to work. Sick leave under the SSP scheme increases from 3 days in 2023 to 10 days in 2026, paying 70% of gross earnings capped at €110/day, with eligibility after 13 weeks of employment. Parental leave options include maternity (26 weeks plus 16 unpaid), paternity (2 weeks), adoptive (24 weeks plus 16 unpaid), and parent's leave (7 weeks), all with specific notice and benefit eligibility requirements.

Ireland's employee benefits are governed by statutory minimums and market practices. Legally mandated benefits include at least 20 days of paid annual leave, 9 public holidays, statutory sick pay (5 days at 70% pay in 2024), maternity leave (26 weeks paid), paternity leave (2 weeks paid), parental leave (26 weeks unpaid), adoptive leave (24 weeks), and redundancy pay after two years of service. Employees are also entitled to paid public holidays, with additional pay or leave if required to work on these days.

Beyond legal requirements, many employers offer optional benefits such as private health insurance, pension schemes, life assurance, income protection, flexible working, and employee assistance programs. Health insurance is common, often subsidized, with tax relief available, while pension contributions typically range from 5-10% of salary, with future auto-enrollment expected. Benefits packages vary by sector and company size, with large multinationals providing comprehensive perks, and SMEs offering more limited options.

Employers must ensure compliance with employment laws, pension regulations, health insurance rules, and tax laws, including maintaining accurate records. Offering competitive benefits aligned with legal standards and employee expectations—such as health coverage, pensions, and flexible work—remains essential for attracting and retaining talent in Ireland.

Employment agreements in Ireland define the rights and obligations of employers and employees, governed by legislation such as the Employment Rights Act 1993 and the Terms of Employment (Information) Acts 1994-2014. They can be written or implied, but must include key clauses like parties, job description, start date, work location, hours, remuneration, benefits, holiday entitlement, sick leave, notice periods, confidentiality, probation, grievance, and disciplinary procedures. Ensuring compliance with these legal requirements helps prevent disputes and promotes a positive work environment.

Irish law recognizes various contract types, including fixed-term, indefinite, part-time, and specific purpose contracts. Probationary periods, typically lasting 3-6 months, are common but not legally mandated; they allow employers to assess suitability and can be extended with prior notice. Confidentiality clauses protect business interests, while non-compete clauses are enforceable if reasonable in scope and duration. Contract modifications require mutual agreement in writing, and termination must follow fair procedures, with protections against unfair dismissal under the Unfair Dismissals Acts.

This structured approach ensures compliance and clarity, safeguarding both employer interests and employee rights in Ireland.

Remote work in Ireland is expanding, driven by technological progress and shifting employee expectations. Employers must navigate evolving regulations, including the Work-Life Balance and Safety Acts, which mandate flexible work requests, health and safety obligations, and data protection. Employees have the right to request remote work, with employers required to consider these requests and justify refusals.

Key employer obligations include respecting the right to disconnect, ensuring ergonomic safety, safeguarding data, and promoting equality. Flexible arrangements such as flextime and hybrid work are common, helping attract talent and boost productivity.

In Ireland, employment termination must comply with strict legal requirements to avoid disputes. Employers are obligated to provide statutory notice periods based on employee tenure, ranging from 1 week for 13 weeks to 2 years of service, up to 8 weeks for over 15 years. Employees must also give similar notice when resigning. Severance pay, or redundancy compensation, applies after two years of continuous service, calculated as two weeks' pay per year plus an additional week, with a weekly pay ceiling of €600 as of 2025.

Terminations can be with or without cause; gross misconduct dismissals (summary dismissals) do not require notice or severance but must follow fair procedures. For lawful dismissal, employers must conduct investigations, notify employees, hold hearings, and allow appeals. Employees with over one year of service are protected under the Unfair Dismissals Acts, which prevent unfair dismissals based on capability, conduct, redundancy, or statutory violations. Failure to follow fair procedures or statutory obligations can lead to claims for unfair dismissal, with remedies including reinstatement, re-engagement, or compensation capped at two years' gross pay.

Ireland's independent workforce is expanding, offering businesses access to specialized skills on a project basis. Correct classification of workers as either employees or independent contractors is crucial to avoid penalties. Key distinctions include control over work, financial risk, and provision of equipment. Misclassification can lead to significant legal and financial repercussions.

Contracts should clearly outline terms such as scope of work, payment, and IP rights, with explicit clauses for IP assignment to ensure company ownership. Contractors manage their own taxes, including income tax, VAT, and potentially corporation tax if operating through a company. Insurance requirements often include professional indemnity and public liability coverage. Independent contractors are prevalent in IT, consulting, creative industries, and healthcare, reflecting the demand for niche expertise and flexible resources.

Ireland's robust economy and EU membership attract foreign workers, necessitating understanding of its complex work permit system. Generally, foreign nationals need both a work permit and a visa to work legally, with some exceptions for visa-exempt nationalities. Employers must secure the appropriate permit based on the job role, skills, and sector, with common types including Employment Permits, Critical Skills Permits, Intra-Company Transfers, and Permits for dependents.

The application process involves securing a job offer, demonstrating labor market needs (if required), and submitting documentation to the Department of Enterprise, Trade and Employment. Key requirements include employer sponsorship, employee qualifications, salary thresholds, and relevant documentation. Processing times vary from weeks to months, with fees depending on permit type. Successful applicants may qualify for long-term residency after five years of legal employment. Employers and employees must adhere to ongoing compliance obligations, including maintaining valid permits and reporting changes, to avoid penalties.

Employers must ensure foreign workers have valid permits, comply with Irish employment laws, and maintain accurate records. Employees are responsible for adhering to permit conditions, updating authorities on personal changes, and maintaining valid documentation. Non-compliance can lead to fines, deportation, or future entry restrictions.