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Employing in Ireland

At a glance

Employment in Ireland

Foreign companies that employ workers in Ireland face several challenges and must adhere to the legal and regulatory framework that is in place.  Most notably there are restrictions depending on the type local entity they have incorporated. In some cases, using an outsourced employer will make the process smoother, and it is recommended to use professional legal services as well.  Our guide explains Irish policies on leave, termination and payment of benefits.

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Payroll & Tax in Ireland

Complying with local payroll and tax requirements is essential for a company doing business in Ireland.  Issues such as tax rates and withholding and social security are all essential in ensuring a seamless human resources operation.  Ireland made paying taxes on one hand cheaper, introducing R&D deductions, but more complex on the other, increasing landfill levies and by requiring additional financial statements to be submitted with the income tax return. Many companies will consider outsourcing these administrative tasks to a GEO (Global Employment Organization).

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Immigration / Work Permits in Ireland

Foreign workers are required to have the proper visas and work permits in Ireland, as established by immigration laws.  Work permits must be secured for employees, and sponsored by a locally licensed and incorporated entity, which can be a problem for companies just entering the Irish market.

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Incorporation

There are several business structures available for incorporation in Ireland, and each has advantages and disadvantages.  In some cases, it will depend upon business factors that you are dealing with, and the scope of planned business activity.  Our guide has a comparison of the time and cost for incorporating standard company structures including Private Limited Liability Company, Sole Ownership and Partnership.

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GEO Solutions or DIY Employment in Ireland?

Companies entering Ireland must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities.  A GEO or Ireland Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have an Irish entity established that can run payroll.

A DIY approach will typically take 6-9 months until there is a properly incorporated WFOE ready to run payroll and cost up to 6 figures if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally, Shield GEO is responsible for all compliance issues related to the employment.

Using Shield GEO Employer of Record Services in Ireland

Payroll Ireland
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities.

 
Grossed income Tax Rate (%)
0-€33,800 20%
0-€37,800 20%
0-€42,800 20%
earned income remainder 40%

The €42,800 amount may, for married couples, be increased by the lesser of: €24,800 or the income of the second spouse. This brings the total maximum standard rate band for a married couple to €67,600, twice the single person’s band. The increase is not transferable between spouses.

Nearly all income is liable to tax. Tax on income that someone earns from employment is deducted from his/her wages by his/her employer on behalf of the Irish Government. This is known as Pay As You Earn (PAYE). The amount of tax that must be paid depends on the amount of the income that you earn and on your personal circumstances.

The Universal Social Charge (USC) is a tax on income. It is charged on gross income before any pension contributions or PRSI. People cannot use tax credits or tax relief (except for certain capital allowances) to reduce the amount they must pay.

Tax Returns Supplied

Yes

Employers Social Security and statutory contributions

Class A (Majority of employed persons)

€38 – €352 inclusive per week = 8.5%;

€352.01 – €356 per week = 8.5%;

€356.01 per week or more à 10.75%;

Class S (Self-employed people, including certain company directors) = N/A

Employees Social Security and statutory contributions

Class A (Majority of employed persons)

€38 – €352 inclusive per week =  Nil

€352.01 – €356 per week = 4%;

€356.01 per week or more = 4%;

Class S (Self-employed people, including certain company directors) = 4% (Employee)

Corporate Income Tax Rate

Equal to 12.5% on taxable profits, if the company is investing in R&D activities the rate can be reduced to 6.5%.

Sales Tax

VAT: 23%

Withholding Tax
  • Tax on interests: 20%;
  • Royalties: 20%
Other Tax
  • Capital gains: 33%;
  • Environmental Tax: Euro 75 per tonne of waste;
  • Stamp Duty (Insurance Contracts): 3% on the insurance premium;
  • Tax on Check Transactions: 50c per check;

 

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