Stacie Groce

BASIC COUNTRY FACTS

Republic of Ireland

Dublin

  • English (99%)
  • Irish (41%)
  • Scots (0.3%)
  • Shelta

4.83 million

Euro

.ie

+353

Euro

STATUTORY LABOR REQUIREMENTS

Probation Period

  • The duration of a probationary period can range from 3 months to 11 months but should not exceed 12 months, regardless.

 Annual Leave

  • Employees are normally entitled to 20 days of annual holiday leave each year in addition to public holidays.

 Public Holidays

  1. New Year’s Day (1st January)
  2. Patrick’s Day (17th March)
  3. Easter Monday (13th April)
  4. May Day (4th May)
  5. First Monday in June
  6. First Monday in August
  7. Last Monday in October
  8. Christmas Day (25th December)
  9. Stephens Day (28th December)

Maternity Leave

  • Female employees are entitled to 26 weeks of maternity leave and 16 weeks of additional, unpaid maternity leave to begin immediately after the end of maternity leave.
    • 2 weeks of leave must be taken before the due date and 4 weeks after.
    • The remaining weeks can be divided as the employee chooses.
    • Employees who qualify for Maternity Benefit must take at least 2 weeks and no more than 16 weeks must be taken before the baby is due

Paternity Leave

  • Fathers are entitled to paid paternity leave within the first 6 months following birth or adoption.
  • Employers are not obliged to pay employees during paternity leave but employees may be eligible to avail of paternity benefit from the state. 
  • The entitlement is 2 weeks’ leave and the intended dates must be notified to the employer at least 4 weeks before the leave is expected to commence.

Sick Leave

  • In general, there is no specific right under Irish employment law for employees to be paid while on sick leave.
  • Most employment contracts have a maximum period of sick pay entitlement in a specific period, i.e. one month’s sick pay in any 12-month period.  
  • The specific company rules regarding sick pay leave should be clearly outlined in the employment contract.

Work Hours

  • The standard Irish work day is from 9 am until 5:30 pm with a minimum half-hour lunch period. Many offices, including government departments, are closed between 12:30 and 2 pm.
  • The average working week is 40 hours and the legal maximum average is 48 hours.

Overtime

  • Overtime pay is not a statutory obligation for employers. 
  • However, many employers pay employees higher rates of pay for overtime.  
  • The employment contract should state whether the employee is required to work overtime and the associated rates of pay for doing so.

Notice Period

  • At minimum, an employee has to give the employer one week’s notice to terminate an employment contract, regardless of their length of service.
  • The amount of notice due to an employee for termination depends on the employee’s length of service. The length of service notice entitlement is broken down as follows:
    • For 13 weeks to 2 years of service, 1-week notice is required
    • For 2 years to 5 years, 2 weeks’ notice is required
    • For 5 years to 10 years, 4 weeks’ notice is required
    • For 10 years to 15 years, 6 weeks’ notice is required
    • For 15 years and beyond, 8 weeks’ notice is required

Severance

  • Employees made redundant are entitled to two weeks' gross pay for each year of service, plus one week's wages. 
  • The payment calculation is subject to a ceiling of €600 per week.

13th / 14th Month Pay

  • No
  • There is no statutory requirement to pay the 13th or 14th month salary.
  • It does not seem to be customary.
  • However workers may decide to exchange other benefits for extra paid leave.

INCOME TAX

  • Individuals who are tax resident in Ireland are normally subject to tax on worldwide income, including employment income, regardless of whether the employment is carried on in Ireland or abroad. 
  • However, exceptions can apply to the following individuals: 
    • Foreign-domiciled individuals 
    • Individuals who commute to work outside Ireland and pay tax on the income from the employment outside Ireland 
  • Individuals domiciled outside Ireland are entitled to a remittance basis of assessment in Ireland on investment income arising outside Ireland and on income from employment duties performed outside Ireland, to the extent that the employment income is paid outside Ireland under a foreign contract.
  • If an individual is on Irish payroll, Pay-As-You-Earn (PAYE) withholding must be accounted for on all employment earnings, including benefits. 
  • If an individual is on a payroll outside Ireland, PAYE withholding is required on the amount of employment earnings (including benefits) attributable to duties performed in Ireland.
  • Nonresidents are generally subject to Irish tax on income arising in Ireland, unless they are protected by the provisions of a double tax treaty.
  • Most payments made by an employer, including salary, bonuses, benefits in kind, certain equity income and expense allowances, are subject to income tax, unless a prior agreement is made with the tax authorities.
  • Individuals resident in Ireland are subject to tax on income from trades and professions carried on in Ireland and abroad. 
  • Nonresidents are taxed on income from trades and professions carried on in Ireland only

Exemption Limits

  • An income tax exemption is available for certain individuals aged 65 years or over. 
  • These individuals are only liable to income tax if their income is above a specified limit. 
  • For 2020, the specified limit is EUR 18,000 for an individual who is single/widowed and EUR 36,000 for a married couple. 
  • These limits are increased in respect of dependent children. Marginal relief may apply where the individual's total income exceeds the specified limit.

 

Filing status

2020 (EUR)

Tax at 20%

Tax at 40%

Single and widowed person: no dependent children

Income up to 35,300

Balance of income over 35,300

Married couple: one income

Income up to 44,300

Balance of income over 44,300

Married couple: two incomes (of at least €26,300 each)

Income up to 70,600

Balance of income over 70,600

DEDUCTIBLE EXPENSES

  • Expenses that may be deducted from taxable income are those that are incurred wholly, exclusively, and necessarily in the performance of the duties of employment. Expenses incurred travelling to and from work and entertainment expenses are not deductible.
  • Personal credits and allowances. The principal credits for the 2019 tax year are listed in the following table. Credits are deducted from the individual’s income tax liability.

Credits

Amount (EUR)

Married persons/civil partners (jointly assessed)

3300

Single person

1650

Widowed person/surviving civil partner

2190

Widowed person/surviving civil partner in year of bereavement

3600

Pay-As-You-Earn (PAYE) allowance (if salary is subject to tax at source)

1650



  • The principal allowances for the 2019 tax year are listed in the following table. 
  • Allowances reduce the amount of income of the individual that is taxable at the top income tax rate.

Allowance at top rate

Amount

Pension contributions to 

 approved schemes (a)(b)

Varies from 15% to 40% of earnings, depending on age of individual

Employment and Investment Incentive

EUR150,000

Start-up relief for entrepreneurs

EUR100,000 plus a carryback of EUR100,000 against each of the preceding six years

Employee Approved Profit Sharing Scheme

EUR12,700

 

  • Expenses incurred wholly and exclusively for the purposes of a trade or profession are generally deductible. 
  • Entertainment expenses for staff functions are deductible if they are reasonable in amount. 
  • All other entertainment expenses are not deductible. 
  • Deductions for automobile expenses are restricted.

 IMMIGRATION

  • The categories of the most commonly used permits in Ireland are summarized below. 

  Critical Skills Employment Permit. 

  • To obtain a Critical Skills Employment Permit, an individual must be employed under an Irish employment contract and paid directly from an Irish payroll. 
  • The minimum remuneration requirement is EUR60,000. 
  • Effective from 1 October 2014, remuneration can be made up of Basic Annual Salary (equal to at least the Irish National Minimum Wage) and Health Insurance Payments. 
  • Individuals in all occupations except those that are contrary to public interest may qualify for a Critical Skills Employment Permit. 
  • A non-EEA national who has been offered an Irish employment contract and will be paid directly from an Irish payroll may be eligible for a Critical Skills Employment Permit if the salary is between EUR30,000 and EUR59,999. 
  • The individual must hold a third-level qualification (at least a degree qualification) and the role must be included in the Highly Skilled Occupations List. 
  • A Critical Skills Employment Permit applies only if the offer of employment is for a period of at least two years. 
  • An initial permit is available for a two-year period (EUR1,000 fee). No more than 50% of employees of an Irish employer may be from non-EEA countries. 
  • An individual who is granted an employment permit for the first time in Ireland is expected to stay with the initial employer for a period of 12 months. Under a new measure, spouses or recognized de facto partners of Critical Skills Employment Permit holders are entitled to seek permission to work directly from INIS. 

General Employment Permit.

  • To obtain a General Employment Permit, an individual must be employed in an eligible occupation under an Irish employment contract and paid directly from an Irish payroll. 
  • A labor market needs test is required
  • The minimum remuneration requirement is EUR30,000. Effective from 1 October 2014, remuneration can be made up of Basic Annual Salary (equal to at least the Irish National Minimum Wage) and Health Insurance Payments. 
  • The remuneration threshold is reduced from EUR30,000 to EUR27,000 with respect to employment permit applications under the General Employment Permit category for the following individuals:
    • Non-EEA graduates of overseas third-level institutions (universities and third-level colleges) that have been offered an Information Technology Graduate position on the Highly Skilled Occupations List 
    • Non-EEA graduates of Irish institutions who have been offered a graduate position on the Highly Skilled Occupations List 
    • Technical or sales support roles with non-EEA language requirements
  • A General Employment Permit is available for an initial period of either six months (EUR500 fee) or up to two years (EUR1,000 fee). 
  • After five years, an indefinite extension may be available for no fee. 
  • No more than 50% of employees of an Irish employer may be from non-EEA countries. An individual who is granted an employment permit for the first time in Ireland is expected to stay with the initial employer for a period of 12 months. 

Intra-Company Transfer Permit

  • To obtain an ICT Permit, an individual must be transferred to a company related to his or her employer in Ireland (that is, sister, parent or subsidiary) and must remain on a foreign employment contract and foreign payroll (full salary must be paid by the foreign employer outside Ireland). 
  • An ICT Permit is available only to senior management, key personnel and individuals who are assigned to Ireland for specific training purposes. 
  • The relevant transferee must have been working for a minimum period of six months with the overseas company before the transfer. 
  • The minimum remuneration is EUR40,000. Effective from 1 October 2014, remuneration must be made up of Basic Annual Salary (equal to at least the Irish National Minimum Wage), board and accommodation, and Health Insurance Payments. 
  • An ICT Permit is available for an initial period of six months (EUR500 fee) or two years (EUR1,000 fee). 
  • An extension for an additional three years is available (EUR1,500 fee). No further extensions are available.

Type of Visa/ Permit

Documentation

Validity

Eligibility

Critical Skills Employment Permit

  • Passport
  • Passport size picture
  • Contract of employment
  • Copy of the letter of support by IDA/Enterprise Ireland, if applicable
  • Details of your employer
  • Details of your employment

2 years

  • An individual must be employed under an Irish employment contract and paid directly from an Irish payroll
  • Minimum remuneration requirement is EUR 60,000
  • The individual must hold a third-level qualification (at least a degree qualification) and the role must be included in the Highly Skilled Occupations List. 
  • Offer of employment must be for a minimum of 2 years

General Employment Permit

  • Employer details
  • Employee details
  • Details of employment 
  • Pay details
  • Passport
  • Passport size picture
  • Contract of employment
  • Copy of the letter of support by IDA/Enterprise Ireland, if applicable

6 months to 2 years

Maximum 5 years

  • Minimum remuneration requirement is EUR 30,000
  • An individual must be employed in an eligible occupation under an Irish employment contract and paid directly from an Irish payroll. 

Intra-Company Transfer Permit

  • Connected Person (Irish Branch) Details
  • Details of Foreign Employer
  • Employee Details
  • Details of Employment
  • Details of Intra-Company Transfer
  • Pay Details
  • Passport
  • Passport size picture
  • Contract of employment
  • Copy of the letter of support by IDA/Enterprise Ireland, if applicable

6 months to 2 years

  • an individual must be transferred to a company related to his or her employer in Ireland and must remain on a foreign employment contract and foreign payroll
  • An ICT Permit is available only to senior management, key personnel and individuals who are assigned to Ireland for specific training purposes. 
  • Minimum remuneration is EUR 40,000

VALUE ADDED TAX

  • Ireland, like all EU member countries, follows the EU VAT Directive on VAT compliance.
  • However, it is still free to set its own standard (upper) VAT rate.  
  • The only proviso is that it is above 15%.  
  • Suppliers of goods or services VAT registered in Ireland must charge the appropriate VAT rate, and collect the tax for onward payment to the Irish tax authorities through a VAT filling.

VAT Rates

Standard Rate

23%

Reduced Rate

13.5%

Reduced Rate

9%

Reduced Rate

4.8%

Reduced Rate

0%

 

WITHHOLDING TAX

Dividends

  • Dividends paid to another company are exempt from withholding tax
  • Dividends paid to a nonresident company or an individual (whether resident or nonresident) are subject to a 20% withholding tax, unless the rate is reduced under a tax treaty or the dividends are exempt from withholding tax under the EU parent-subsidiary directive or under a specific exemption under domestic legislation

Interest

  • The withholding tax on annual interest paid to a nonresident is 20%, unless the rate is reduced under a tax treaty or the interest is exempt from withholding under the EU interest and royalties’ directive or under a specific exemption under domestic legislation

Royalties

  • The withholding tax is 20% on patent royalties
  • All other royalties are exempt
  • The rate may be reduced under a tax treaty or the payment may be exempt from withholding under the EU interest and royalties’ directive or under a specific exemption under domestic legislation 

Withholding Tax

Dividends

20%

Interest

20%

Royalties

20%

TERMINATION

  • If you are being dismissed from your job or made redundant you may have certain entitlements including notice and pay for annual leave earned but not taken.
  • At minimum, an employee has to give the employer one week’s notice to terminate an employment contract, regardless of their length of service.
  • The amount of notice due to an employee for termination depends on the employee’s length of service. The length of service notice entitlement is broken down as follows:
    • For 13 weeks to 2 years of service, 1-week notice is required
    • For 2 years to 5 years, 2 weeks’ notice is required
    • For 5 years to 10 years, 4 weeks’ notice is required
    • For 10 years to 15 years, 6 weeks’ notice is required
    • For 15 years and beyond, 8 weeks’ notice is required
  • Employees made redundant are entitled to two weeks' gross pay for each year of service, plus one week's wages. 
  • The payment calculation is subject to a ceiling of €600 per week.

 STATUTORY BENEFITS

  • These are mandatory benefits as postulated by law
  • These include annual leave, public holidays, probationary period, sick leave, maternity leave, paternity leave, notices period and severance pay.
  • Statutory benefits also include social security benefits which cover Jobseeker's Benefit, Illness Benefit, Maternity Benefit, Invalidity Pension, Carer's Benefit and State Pension

Statutory Benefits

Probationary Period

Annual Leave

Public Holidays

Sick Leave

Maternity leave

Paternity Leave

Severance Pay

Notice Period

Social Security Benefits

PAYMENTS AND INVOICING

  • The tax year for individuals runs from 1 January to 31 December. 
  • Individuals who are subject to income tax for the tax year must file tax returns for earned and investment income and capital gains under the self-assessment rules. 
  • To avoid a surcharge penalty, taxpayers must file their returns by 31 October following the end of the tax year.
  • Tax on salaries and benefits normally is collected through the PAYE system.
  • Income tax self-assessment applies to self-employed individuals. 
  • These individuals include persons receiving rental income and investment income.

EASE OF DOING BUSINESS

  • The ease of doing business index is an index created by Simeon Djankov, an economist at the Central and Eastern Europe sector of the World Bank Group.
  • Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
  • According to the World Bank Ireland ranked 24th in the World in 2019 in terms of ease of doing business.

Employee Accruals

   
Christmas Bonus%


0%

Christmas Bonus Over Vacations %

0%

Severance per Year %

Employees are entitled to severance pay that equals two weeks of pay after one year of service (2.74% of annual salary)

Vacations % Employees are normally entitled to 20 days of annual holiday leave each year in addition tospublic holidays (5.49% of annual salary)
Notice %

Employees are entitled to 1 week of notice after one year of service (1.37% of annual salary)

Christmas Bonus Over Notifications% 0%
Vacations Plus% 0%
Total percentage of Salary (yearly) The total employment accruals as a percentage of salary per anum are equal to 9.6%

Employer Accruals

Additional information (Country Accruals)

   
PRSI 11.05%
Maternity  26weeks paid
Vacations 7.95%
Description Employer PRSI contributions are uncapped and levied at a rate of 11.05 percent on all taxable employment income including benefits-in-kind (but excluding certain share related benefits).
In the case of a foreign employee resident but not domiciled in Ireland and not covered by a reciprocal social security agreement, the employee PRSI contribution is payable at 4 percent on all employment income whether or not remitted to Ireland.

 

Employer Accruals Additional information

    Employment Accruals
Annual Leave Employees are normally entitled to 20 days of annual holiday leave each year in addition to public holidays. This equals 5.47% (20/365 days) of annual income
Maternity Leave Female employees are entitled to 26 weeks of maternity leave and 16 weeks of additional, unpaid maternity leave to begin immediately after the end of maternity leave.

This equals 50% (26/52 weeks) of annual income

Paternity Leave Fathers are entitled to 2 weeks of paid paternity leave This equals 3.84% (2/52 weeks) fo annual income
Sick Leave Most employment contracts have a maximum period of sick pay entitlement in a specific period, i.e. one month’s sick pay in any 12-month period. This equals 8.33% (1/12 months) of annual income
Severance Employees made redundant are entitled to two weeks' gross pay for each year of service, plus one week's wages.
The payment calculation is subject to a ceiling of €600 per week.
This equals 5.76% (3/52 weeks) of annual income
Social Security Ireland imposes payroll taxes for Pay Related Social Insurance (PRSI) on all employment income, including most benefits. Employer's contribution rate is 11.05% This equals 11.05% of annual income