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Payroll in Ireland

Payroll in Ireland

The Pay As You Earn system in Ireland

Payroll administration is quite elaborate in Irish companies because of the Pay As You Earn (PAYE) system employed to calculated employees’ taxes. The PAYE system is used by employers to calculate and deduct the income tax from employees’ salaries and other wages at the work place. Additionally, Irish companies must also calculate and withhold the Pay Related Social Insurance (PRSI). The first step in payroll administration is to establish the income tax calendar for employees. The income tax calendar in Ireland starts on January, the 1st and ends on 31st of December. In order to administer the payroll, Irish accountants are required to fill in the PAYE forms. However, it is also common for companies to require the specialized accounting services of Irish experts in order to streamline payroll administration procedures.

Determining employment status of an individual in Ireland

The Irish legislation makes a clear distinction between employment contracts and contract for service. While the employment contract defines the relation between an Irish company and its employee, the contract for service regulates the relation between a company and the services provided by a sole trader. Payroll administration for Irish employees is determined as it follows:

  • – they must be under the control of an Irish manager or supervisor,
  • – they must supply a certain labor only,
  • – they receive a fixed salary,
  • – the employee will not supply any equipment for the job he or she provides,
  • – may not sub-contract the work he or she renders,
  • – the employee works for an Irish company or individual directly,
  • – works according to an established schedule.

Opposed to employees, Irish self-employed individuals are required to handle payroll administration themselves or ask for the services of Irish specialists. Self-employed individuals will usually have their own business, will assume certain financial risks, may hire other individuals and sub-contract their work. Sole trader may also provide their services to more Irish companies and do not earn a fixed income on a monthly basis.

Payroll services available in Ireland

In order to facilitate payroll administration our specialists in Ireland provide the following services:

  • – determining employment status of individuals,
  • – preparing monthly salaries documents,
  • – registration with the social insurance authorities,
  • – tax registration for companies.

For a complete list with the available payroll administration services, please contact our experts in company registration in Ireland.