If you have employees working in Ireland, are looking to establish an Irish branch of your UK company, or are considering relocating your UK company, you may need to start managing payroll in Ireland. Irish payroll regulations differ from the UK, and it is important to understand the differences to ensure compliance.  

This article will provide an overview of Irish payroll services for UK companies with employees in Ireland, highlighting the key differences between payroll in Ireland and payroll in the UK, employment law, and exemptions to payroll taxes.

Differences between UK and Irish Payroll

This section explains the key differences in payroll processing in Ireland versus the UK. Our IPASS-qualified Payroll Team has cross-border expertise so we are happy to provide expert support for companies operating with two payroll systems.

Tax payments

  • In Ireland, taxes deducted are remitted to the Irish Revenue Commissioners and in the UK, taxes deducted are remitted to HMRC.
  • UK employees get tax codes that determine their tax calculations. Irish employees get tax credits and rates for their tax calculations.
  • In the UK, the tax year runs from 6th April to 5th April the following year and in Ireland, the tax year runs from 1st January to 31st December. The deadline dates for payroll returns to Revenue is on the 23rd and HMRC is on the 22nd.
  • In the UK, employees are issued a P60 at the end of a tax year and a P45 when they leave employment. In Ireland, these documents are called the Employee Detail Summary and are available through Revenue’s “myAccount” service.

Tax deductions

  • Ireland taxes Pay As You Earn (PAYE), Universal Social Charge (USC), Employee Pay Related Social Insurance (PRSI) and Employer PRSI. UK taxes Pay As You Earn (PAYE), employee’s National Insurance, and employer’s National Insurance.  
  • The UK and Northern Ireland have the same tax deductions, but it is different for Scotland and Wales.  
  • In the UK, employees are allowed to use payroll to repay a student loan. This is not possible in Ireland.  
  • UK salaries can be deducted to pay back court fees. Ireland does not have this. 
  • In Ireland, Local Property Tax (LPT) can be deducted payroll, but it can’t in the UK. 
  • Benefit in Kind is treated differently in each country. 

Differences between UK and Irish Employment Law

Areas such as pension, wages, and working hours vary between the UK and Ireland. Please note that Employment Law should also be consulted with an Employment Law and HR expert – if you need support in this area, we are happy to make a recommendation to one of our trusted partners who have cross-border expertise.

  • Pension

    In the UK, it is mandatory that employers are registered with the Pension Regulator and UK companies have their employees enrolled in a pension scheme. Ireland is set to introduce a mandatory pension in 2024.

  • Wages

    Minimum wage rates are different in the UK and Ireland, so we recommend that you speak to a professional Payroll Team about your requirements to get the most up-to-date advice on paying your staff.

  • Working hours

    There are 9 public holidays in the UK versus 10 public holidays in Ireland. Rest break times are also different, so we recommend that you speak to an employment law expert for specific advice on your business.

  • Sick pay

    In the UK, employers are obliged to pay their eligible staff Statutory Sick Pay (SSP) for a period of up to 28 weeks. In Ireland, employees have a statutory right to 3 days' sick pay a year (the legal minimum) and the number of days will increase each year until the employee has 10 days in 2026. Statutory Sick Pay in Ireland is also paid by the employer.

  • Redundancy payment entitlements

    In the UK, payment amounts are based on the age, weekly pay, and number of years in the job and in Ireland, it is calculated on years of service alone.

Are there any exemptions to payroll taxes in Ireland?

  1. If the employee living in Ireland makes under €13,000 in a year, they don’t pay USC. 
  2. In Ireland, there are USC exemptions for employees with medical cards. 
  3. Shareholders of companies with over 50% shares don’t pay Employer PRSI. 
  4. There are variations in the amount of employee PRSI an employee pays depending on age. 

What do employees in Ireland need?

01.

Personal Public Service Number (PPSN)

In Ireland, employees need to obtain a Personal Public Service Number (PPSN) and then notify Revenue of their employment. The Department of Social Protection allocates PPS numbers to individuals.
02.

Register with Revenue for ``MyAccount``

Once an employee has obtained their PPS number, they need to register their job details through the “Jobs and Pensions” service which is available on Revenue’s Online Service (ROS).
03.

Obtain a Tax Credit Certificate (TCC)

When the employee has a Revenue account, they can apply for a TCC - a breakdown of their tax credits and rate bands. This ensures that the employee pays the correct amount of income tax and USC.

How We Help

Outsourced payroll services in Ireland can help UK companies to ensure payroll processes are efficient, accurate, and compliant with Irish payroll regulations.  

Contact us today to learn more about how our payroll services can benefit your business. We offer tailored solutions to meet your business needs. 

FAQ

Can I work for a UK company and live in Ireland? +
Yes, it is possible to work for a UK company and live in Ireland, but you need to be processed on Irish payroll. The UK company needs to register with Revenue for a PAYE number in Ireland and pay Employer PRSI for each employee. The UK company must also follow Irish Employment Law rules, e.g. sick pay, unless their company policy is more favourable to the employee.
What is a PAYE Exclusion Order? +
A PAYE Exclusion Order is a legal document issued by the Irish Revenue Commissioners that exempts an employee from some Irish payroll taxes (PAYE and USC), and the employee can pay payroll taxes in the country they are living in. It is usually given when an employee who is resident in Ireland and on Irish payroll leaves Ireland to live and work abroad.

An Exclusion Order can be an effective way to reduce payroll costs for employees who meet the eligibility criteria. However, if the employee is resident in Ireland for 183 days in a year or 280 days in two years they can stay on Irish payroll.

It is also important to note that there are strict requirements that must be met to obtain an Exclusion Order so reach out to our team to discuss outsourcing your payroll services to our IPASS-qualified Payroll Team who are experts and ensures compliance with Irish payroll regulations.