Episode 22: Payroll in Ireland

Luisa Rollenhagen (00:07): Hi everyone, welcome to another episode of Payroll Around the World! I’m your host, Luisa Rollenhagen.  

Payroll Around the World is your all-inclusive guide to understanding how payroll operates across different countries. We explore the unique aspects of each nation’s payroll system, with insights from ADP experts on the ground. We also talk to locals who share their experiences with work and pay in their home countries.   

After all, payroll can’t truly be global if it isn’t local as well.  

Today, we’re going to Ireland. The European country punches well above its weight regarding its role as an important center of enterprise in the EU. Ireland is home to European headquarters for some of the biggest names in tech, pharmaceuticals, and finance. These multinationals are drawn to the country by its low corporate tax rate, a stable and well-regulated economy, and an English-speaking workforce The result is a country that, per capita, hosts more multinational employers than almost anywhere else in Europe. 

But despite Ireland’s proximity to the UK, treating its payroll systems as part of the same system is not a mistake multinationals should make.  

Ben Dale-Gough (01:27): 

Sometimes there’s the misappreciation that actually they are two distinct countries and you have the United Kingdom and Ireland. Now to further complicate things, I suppose we have Northern Ireland, which is part of the UK and therefore follows the regulation set in London for the UK. But then we have Ireland or the Republic of Ireland, which is its own completely distinct country, with its own government, its own legislation, its own tax rules.  

Luisa Rollenhagen (01:52): Irish payroll has its own tax system, its own reporting infrastructure, and, as of 2026, a new mandatory pension scheme that’s reshaping the country’s retirement system.

Deirdre Edwards (02:04): We’ve got such a young labor force, to see them automatically enrolled into a pension, that’s going to be fantastic for them in the fullness of time. 

Kieran (02:14): 

I think pension is going to cost the state a fortune in the future. So I think it’s definitely a good idea. 

Luisa Rollenhagen (02:21): That was Kieran, a pub manager in Dublin who’s going to be sharing his experiences with the new pension scheme a bit later in the episode. 

But first, I’d like to introduce our experts for this episode. Hello Deirdre and Ben, thank you for joining us today! 

Deirdre Edwards (02:36): 

Hi, my name is Deirdre Edwards. I’m the service director for ADP Ireland. 

Ben Dale-Gough (02:41): 

Hi, my name is Ben Dale-Gough. I look after the Irish, UK, and Scandinavian teams for ADP and I look after our service organization and client facing teams. 

Luisa Rollenhagen (02:53): It’s great to have you here today. Let’s start with an overview of Ireland’s economy and labor market. During the late 90s and early 2000s, the country experienced an economic boom, dubbed the “Celtic Tiger”. Although Ireland’s growth has levelled off in recent years, it’s still a stable, high-income economy. 

Ben Dale-Gough (03:14): 

The Irish economy is a strong economy. It’s a very different economy to other European countries of a comparable size.  

GDP-wise, it’s increasing around about 2% year on year. Inflation is in a strong place, it hasn’t spiked recently, but it’s around just under 3%, which is pretty consistent compared to continental Europe, the UK and the US. And employment is pretty much at full employment currently within Ireland, so that creates a tight labor market in itself. 

Now, going back to why Ireland’s maybe slightly different to other economies of a similar size, the Irish population is around about five million. However, because of the uniqueness of the Irish economy, there’s a high number of multinational organizations based out of Ireland. 

Now they’re drawn to work in Ireland because the corporate tax rate is low, but that’s just probably one of the factors. There’s also a strong, well-regulated economy. English-speaking obviously is big in Ireland, so that makes it an easier place for multinationals to land. And I think just the fact that as soon as you get some multinationals landing in the country, that tends to create more, it’s a self-perpetuating prophecy really, to a degree. So consequently, we see in Ireland probably at least twice as many multinationals based in Ireland compared to a comparable country of, I don’t suppose, Denmark or Norway, that kind of size. 

Luisa Rollenhagen (04:32): The presence of all these different multinationals also means there are quite a few expats working in Ireland, right? Are there complexities around hiring or processing expats that employers might not be aware of? 

Deirdre Edwards (04:45): 

I think the key thing to remember with expats is the taxation isn’t normal. You can’t just set them up on a payroll and assume they’re going to be taxed in the same way as a normal PAYE employee. It can be very different for every single individual, the circumstances really need to be taken into account. We’d always advise our clients to get financial advice on exactly how to treat an expat employee. If they have two expats, they could be different to each other. So it’s very important they pin down exactly what should be applied to each of those individuals. They could be resident in different countries, where they should pay their equivalent of PAYE, or where they should pay their PRSI. That needs to be very carefully considered and determined. We would always direct them to seek really strong financial advice. 

Luisa Rollenhagen (05:42): Ireland has also always had a very particular relationship with its neighbor, the UK. What do multinationals need to know about how this relationship shapes Ireland’s payroll landscape? 

Ben Dale-Gough (05:53): 

Sometimes there’s the misappreciation that actually they are two distinct countries and you have the United Kingdom and Ireland. Now to further complicate things, I suppose we have Northern Ireland, which is part of the UK and therefore follows the regulation set in London for the UK. But then we have Ireland or the Republic of Ireland, which is its own completely distinct country, with its own government, its own legislation, its own tax rules. 

And also, I suppose there’s a bit of a challenge between people who work across the border, because it’s an open border between Northern Ireland and the Republic of Ireland. So you do see people kind of crossing that border to work, which again, from a payroll perspective, adds additional complications. So beyond just expats, you have people transiting that border every day as well. 

Deirdre Edwards (06:45): 

It’s an interesting challenge in payroll, with that cross-border relief and acknowledging how many days in the tax year are spent on either side of that border, and where that individual should be taxed, what their residency is, and all of that. So it’s an interesting one that adds a layer to what could be a normal payroll. 

Luisa Rollenhagen (07:04): Is there a formal taxation agreement that governs that cross-border relationship? 

Deirdre Edwards (07:08): 

Yeah, there would be. There’d be a share taxation agreement as there would be with a lot of other European countries. So there’s an understanding, as I referenced, a certain amount of days need to be spent working in a specific area and that qualifies then the taxation that would unfold based on that. 

Luisa Rollenhagen (07:23): Is there anything else employers need to watch out for with the Northern Ireland border? 

Deirdre Edwards (07:28): 

I don’t think there’s anything specific to watch out for. The tax year in Ireland is January to December. So we run in line with the calendar year, but the UK is the unique one there, where it’s April to March. 

Ben Dale-Gough (07:43): 

I guess the one thing is kind of employment legislation is different, because they are different territories, different countries. And I guess one thing that’s important at the moment for Ireland — and not really for the UK — is the EU Pay Directive. That’s something that is a change to the way companies operate, in terms of the disclosure of information that has to be given to prospective employees at the point of recruitment and selection, and also whilst they’re there. And a big change too in terms of gender pay gap reporting. It’s been there for quite some time in Ireland, but now it’s more about being able to show a clear remediation plan to remove any differences. 

Luisa Rollenhagen (08:29): Going back to the topic of taxation: let’s talk about the components of the Irish tax system. The three big elements are PAYE, PRSI, and the Universal Social Charge. What do employers need to know about these? 

Ben Dale-Gough (08:44): 

Another thing that’s often, is not normal I guess, is the fact there are three bands. Most economies work on social security and then income tax, but within Ireland there’s that extra level of taxation that gets applied as well, which will potentially catch organizations out, because that’s not something they’re expecting, and employees maybe aren’t expecting it either. 

Deirdre Edwards (09:04): 

The two most longstanding ones are PAYE and PRSI. USC was a more recent addition to the tax system here. PAYE — Pay As You Earn — is the most general tax that every individual will pay over to the Irish Revenue for their income. If we use a straightforward example of a single individual, there’s two tax bands, with thresholds of income for each. So 20% and 40%. And once you exceed the threshold, which is quite generous, you go into the 40% tax bracket. 

Similar thresholds, but much smaller margins, apply for the PRSI, the pay-related social insurance. That tax is primarily for contributing to things like disability benefits and social welfare payments that you may need to claim against throughout your life as you move on, similar to pension. The Universal Social Charge also contributes to some degree to the social welfare coffers, but it’s a much more general budget that the government will then implement for public services. 

Luisa Rollenhagen (10:12): And just to confirm: are these employer or employee contributions, or both? 

Deirdre Edwards (10:18): 

So for PAYE, they’re employee. For PRSI, there’s employee and employer. And for USC, it’s just employee. 

Luisa Rollenhagen (10:27): Got it. 

Ireland introduced real-time reporting with Revenue back in 2019. Tell me a bit about the impact this has had for payroll teams, and how the system works in practice. 

Deirdre Edwards (10:39): 

This had a very significant impact, in a very positive way. Historically, we would’ve had to complete forms to declare the year-end taxation for all of our clients, which was an incredibly time-consuming and quite manual process. Real-time reporting eliminated all of that. Each time a payroll is processed, the system automatically declares the figures to Revenue directly. So it’s constantly kept up to date. 

The further impact of that is, not only is the year-end filing automated, but the general payroll forms that we would’ve seen in the past, like P45s and P60s at year end, all of those P-forms no longer exist. So from a payroll specialist’s point of view, incredibly positive, because all of that additional work is eliminated. And from an employee’s and an employer’s point of view, the volume of queries around ‘why am I being taxed this way, why am I not on the correct tax status’, all of those things were dramatically reduced, because it’s constantly up to date between the payroll system and Revenue. 

So it really smoothed out the entire process in a very significant way. Each month is like a year-end. It just constantly rolls forward and updates as we move through the year. So when we go from December to January, where we historically would’ve done our year-end filings, it’s just like going from one month to another. There’s no huge workload at year-end anymore. It really is fantastic. 

Luisa Rollenhagen (12:39): That sounds quite different from the experience of payroll teams in other countries. 

Ben Dale-Gough (12:44): 

Yeah, it’s impressive compared to a lot of other markets. The elimination of those forms, and end of year being such a painful time for payroll departments and organizations, it’s now just the ongoing cumulative calculations being constantly updated, rather than corrections having to be made at the end of the year. So the figures people have got, and the pay they get, is always correct and up to date. It’s a really different system, far more advanced than a lot of nations across Europe. 

Luisa Rollenhagen (13:12): 

And Ben, you have a good perspective on that because you’ve worked across many different countries. 

Ben Dale-Gough (13:17): 

I think there’s one other really key difference. Let’s take the UK, for instance. How it works in the UK is an organization will apply a tax code. The tax authority gives a tax code to an employee, and then the employer or payroll department works out how that should be used, using logic to figure out what bandings they fall into and what their net pay will be. So a lot lies on the employer. Whereas in Ireland, instead, there’s a Revenue Payroll Notification — an RPN — issued for each employee, and it tells the employer exactly what to do: what tax rates should be applied, what levels of USC or PRSI apply. It really does take a lot of the heavy lifting away, and the risk away, from the employer and the payroll department, because it’s so prescriptive. 

Luisa Rollenhagen (14:08): So what happens when an employer makes a mistake in this real-time reporting process? 

Deirdre Edwards (14:13): 

If a mistake is made, we can look back on the system for the relevant period where that error was made, and make those corrections within the system, then load a fresh filing to Revenue, so we can generate the corrective figures directly. If there’s an additional liability due because of that correction, we can also make that adjustment on the client’s behalf. Or, if it’s the other way around and a refund is due — fantastic — Revenue will then refund that directly to the client as well. 

So it’s certainly possible to make those corrections. I think really the key is to bear in mind that the relationship with Revenue is very important, and to not find yourself in a position where you’re having to make those corrections too often. You really need to be on top of what you’re filing and when, and show best efforts to be as accurate as possible throughout the year. There’s always going to be the odd time where something can be incorrect and has to be adjusted, and Revenue can be very understanding with that. The key is to follow up with the payment of anything that is due. 

Luisa Rollenhagen (15:29): And what’s a common mistake organizations make when they first come to Ireland? 

Ben Dale-Gough (15:35): 

Another common mistake would be for organizations starting to run payrolls in Ireland is just not knowing necessarily about registering employees and getting RPNs. Because if you don’t, the emergency tax codes that are applied to those employees are pretty punitive compared to other countries. So it’s really important that any organization stepping into Ireland understands the need to make sure their employees are registered and get those RPNs, otherwise it can be costly and time-consuming to have to rectify that as well. 

Luisa Rollenhagen (16:09): Just to clarify: what’s an RPN? 

Ben Dale-Gough (16:09): 

It’s the revenue payroll notification. Everyone is assigned one of those. Each employee is assigned one, and that determines what rate of tax they pay, the bands they fall into, the USC they pay, everything, really. 

Luisa Rollenhagen (16:22): Staying on the topic of taxes: benefits in kind are also taxed immediately through payroll in Ireland. Where do employers tend to get this wrong? 

Deirdre Edwards (16:32): 

So with benefits in kind, I think the most common ones we’ll see on a payroll are health insurance and company cars. For health insurance, for the most part, it’s a very smooth communication between the healthcare provider, the client, and the organization. They’ll get an annual statement of all the members within the healthcare scheme, and the monthly figure, or whatever the frequency of the payroll is, gets loaded into the payroll product and taxed each month. So for the most part, it should just take care of itself. Where we see a challenge with healthcare is it normally doesn’t run tidily with the January to December year. Their renewal happens at some point throughout the year. So the key is for the figures to be updated immediately when the new year starts for the healthcare cover. 

For car BIK, that’s where we tend to see the most challenges when it comes to benefits in kind. If an employee changes their car throughout the year, where there’s a different value, it’s based on the original market value of the car, and the calculation is worked off that. It also acknowledges the kilometers that are going to be done. So when those two things change throughout the year, it’s very important that clients stay on top of that data and do a fresh calculation, making sure the adjusted monthly figure acknowledges that change and is correct for the remainder of the year. Once the starting figures are correct within payroll, the monthly figures, and constantly kept up to date, the taxation on them will just take care of itself. 

Luisa Rollenhagen (18:10): And is health insurance something employers in Ireland are obliged to provide? 

Deirdre Edwards (18:14): 

It’s a private health cover. There’s numerous providers within Ireland. It’s not something employers are obliged to offer. It is definitely a benefit, but we do see it on a good number of payrolls for our clients. The healthcare cover is fantastic when you’re part of a private healthcare scheme. We see it more and more, because it’s a great benefit for employers to be able to offer to their employees, and it adds appeal for new employees coming to an organization. So yeah, absolutely not mandatory, but widely offered. 

Luisa Rollenhagen (18:51): Let’s talk about auto-enrollment for pensions. This is something that came int3o effect in January 2026. How prepared were employers for this, and how does it actually work? 

Deirdre Edwards (19:03): 

Every individual that earns up to a certain amount is automatically enrolled into the pension, that is, if they’re not already in a private pension scheme with their employer. It was really widely advertised across all national television and radio stations. It really was everywhere. So most employers were very prepared for it. ADP as an organization sent numerous communications to our clients and had endless calls helping them prepare. It was something that was talked about for a good number of years before it actually came into effect, so it wasn’t a shock to anyone. Indeed, the launch date was postponed a couple of times. So everyone was well prepared for it when it came into play. It’s a fantastic initiative. 

We’ve got such a young labor force, to see them automatically enrolled into a pension, that’s going to be fantastic for them in the fullness of time. 

Luisa Rollenhagen (20:04): To find out what auto-enrollment actually feels like from an employee’s perspective, we spoke to Kieran, who manages a pub in the center of Dublin. 

Kieran (20:13): 

So I’m a bar manager. I’ve been here 28 years under previous owners and now the current owners. It’s in the center of Dublin.  

Luisa Rollenhagen (20:21): Kieran had actually been offered a workplace pension years before auto-enrollment ever came into the picture. But, like a lot of people, he never quite got around to it. 

Kieran (20:30): 

It was offered by the employer many years ago and I just put it off and thinking I was young enough, I’d get it sorted later, and then just later got later and later and didn’t do one. 

Luisa Rollenhagen (20:41): Looking back, he puts it down to where he was in life at the time. 

Kieran (20:45): 

Back then I was newly married. I had a mortgage, bought a house and you maybe think another … Yeah, coming out of paycheck was probably … It might have impacted, but then I didn’t think of the tax breaks you get or all the other benefits that were added. So again, it’s just a bit of stupidity on my behalf. 

Luisa Rollenhagen (20:58): When auto-enrollment was officially announced, though, Kieran was intrigued and looked up the benefits of the program. 

Kieran (21:04): 

I keep an eye on the news and that’s just for these sort of things. So once they said that it was starting, I thought, yeah, that sounds like a good idea. And so yeah, I’m not sure. I can’t give you a date, but whatever day they announced it, yeah I heard about it and I looked it up and I thought yeah, great idea. 

Luisa Rollenhagen (21:17): He also says that once he was enrolled, the impact on his net pay wasn’t as significant as he thought it would be. In fact, it made him think more about the importance of saving up for retirement. 

Kieran (21:30): 

It didn’t affect me so much. For me, I think it’s, I don’t know, 12.75 or something or whatever it is, 1.5% or something. So mine varies every week because it’s hourly, depending on what way I work, but my wage differs probably most weeks. So yeah, I mean, I noticed it, but I thought it was a good thing still. So I mean, it’s something, like I said, I wish I’d been doing a long time ago. I think for a lot of staff, I think maybe older people who haven’t got it will appreciate it more. The fact that it’s actually taken and you’re not having to put it away yourself, I think it’s easier. 

Luisa Rollenhagen (21:58): Kieran also had some thoughts on what auto-enrollment might mean for people in a tighter financial position. 

Kieran (22:04): 

There’s a lot of people working close to the edge nowadays, so that might make a difference with them. I think I definitely tried to make a savings elsewhere if it was, because it’s a good idea, because if they’re struggling now, they’ll be struggling a lot more later. 

I think we’re getting an older population now and pension is going to cost the state a fortune in the future. So I think it’s definitely a good idea, but yeah they should have done it many years ago. 

Luisa Rollenhagen (22:30): I wanted to learn more about how the auto-enrollment scheme works, so I went back to Deirdre and Ben to ask about specifics. 

So from what I understand, the scheme works on an opt-out system, is that correct? 

Deirdre Edwards (22:44): 

The scheme, once an employee is auto-enrolled, they have to stay part of it for six months, and then after that they can opt out. They don’t have to stay within it, and they don’t then have to do the company pension scheme either if that’s their decision, but within two years of that, they’ll be auto-enrolled again. So there’s a framework in place to constantly reinforce: you should be in a pension scheme. 

Luisa Rollenhagen (23:09): Could you give us a quick overview of how pensions generally work in Ireland? 

Deirdre Edwards (23:13): 

Within a payroll, there’s an employee contribution and an employer contribution. More often than not, you’ll see that an employer will match the employee’s contribution, and in some cases they’ll exceed it. It works through payroll in the same way as every other fixed payment or deduction. It recurs every single pay period. It’s a gross deduction, so there’s no PAYE against it. So there’s a benefit there for the employee in the long run. It reduces their tax liability in a given pay period. So there are definitely incentives there, and in the fullness of time, the normal benefits that go with being part of a pension scheme. 

Luisa Rollenhagen (23:55): I see. 

We’re nearing the end of the episode, but before we go, I’d like to ask my favorite question. What do you personally love about working in payroll in Ireland? 

Deirdre Edwards (24:06): 

I suppose for me, I mean, payroll is the backbone really, isn’t it, of every business? Your people work so hard for you, and it’s absolutely critical that you get that payroll right and on time, every single pay period. So it’s a really important relationship we have with our clients, and it’s incredibly rewarding when you build the strength of that relationship and communication back and forth. To see the team here work as hard as they do, and achieve all of those goals on behalf of the clients, they entrust a lot to us. So it’s incredibly rewarding at the end of the day, and we love to get paid as much as everyone else does, so it’s great to get it right on their behalf. 

Ben Dale-Gough (24:46): 

I think with Ireland, I think it’s just the scale and the breadth, the spectrum of clients. I’ve touched on the global nature of working in Ireland, which is disproportionate to other countries. From some of the biggest companies in the globe — and I’m not going to drop names, but you probably know who I’m talking about — right at the other end, where we’ve got people in shops with maybe five people in that payroll. So just the sheer breadth of clients, and the different challenges that brings, and the value we can add — supporting a business that has no payroll team whatsoever, to giving in-country advice and supporting larger global organizations moving into a brand-new territory, where we’ve got expertise they can really lean on. 

Luisa Rollenhagen (25:31): That’s a wonderful note to end on. 

Deirdre and Ben, thank you so much for joining us today. It’s been a real pleasure learning about Irish payroll, from the details that set it apart from its neighbors to the ins and outs of its real-time reporting system, as well as the auto-enrollment pension scheme. 

I hope you got a bit more insight into the intricacies of payroll and the labor landscape in Ireland today. If this episode has piqued your interest or your company is considering expanding into Ireland, please visit uk.adp.com to learn more. 

And don’t forget to subscribe to learn more about payroll around the world with each new episode.   

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