Irish payroll moved to real-time reporting in 2019, and the cost of getting it wrong has gone up. A missed PSR submission, an outdated RPN or a miscalculated benefit-in-kind can lead to an employer-side reassessment plus interest. The good news: modern payroll software does most of the heavy lifting if it's set up correctly.
What is PRSI and how does it work?
PRSI (Pay-Related Social Insurance) funds social welfare entitlements including state pension, jobseekers, illness and maternity benefits. Employee PRSI is 4.1% on weekly earnings over €352 (2026). Employer PRSI is 8.9% on earnings up to €441 per week and 11.15% above that — meaning every €1 of gross pay costs the employer roughly €1.11. Self-employed Class S is 4% on all income with a €500 minimum annual charge.
How do I set up payroll for my first employee in Ireland?
Step 1: register as an employer with Revenue via ROS (form TR2 if not already a company taxpayer, or via "Add a Tax" if you are). Step 2: choose payroll software (BrightPay, Sage Payroll, Collsoft, Thesaurus or cloud-only options like Xero Payroll) — all integrate directly with Revenue's ePAYE system. Step 3: gather the employee's PPSN and a Revenue Payroll Notification (RPN) from ROS. Step 4: run the first payroll and submit a payroll submission (PSR) to Revenue before or on the pay date.
What are typical Irish payroll deductions?
For each pay run you deduct from gross pay: (1) PAYE (income tax) using the employee's tax credits and standard rate cut-off point from their RPN, (2) PRSI Class A1 at 4.1% (employee) and a separate employer 8.9–11.15%, (3) USC at progressive rates, (4) Local Property Tax if deducted at source, and (5) any voluntary items like pension contributions, bike-to-work or salary sacrifice. The net pay is what hits the employee's bank account.
What is ePAYE / real-time reporting in Ireland?
Since January 2019, Irish employers must report payroll to Revenue in real time — a payroll submission (PSR) must be made on or before each pay date via ROS. Revenue calculates the monthly statement (P30) automatically and the employer pays by the 23rd of the following month. Annual P35s were abolished; an Employment Detail Summary is generated automatically each January. Late submissions trigger penalties.
How much does outsourced payroll cost in Ireland?
Typical pricing: €25–€40 setup per employee, then €5–€12 per payslip per period for small employers (1–10 staff), reducing per-payslip for larger headcounts. A 5-employee monthly payroll typically costs €60–€90/month including all Revenue submissions, payslip distribution, employer-cost reporting and year-end. We bundle payroll into our SME service packages from €120/month for up to 10 employees.
What records do I need to keep for payroll?
Keep for 6 years: signed employment contracts, payroll submissions (PSRs) and payslip copies, RPNs, sick-leave certificates, employee timesheets, expense claims and reimbursement records, pension scheme documentation, and copies of any benefit-in-kind calculations. WRC (Workplace Relations Commission) inspections separately require contracts, hours-worked records (Organisation of Working Time Act) and pay statements — overlapping but not identical to Revenue's requirements.
Monthly Irish payroll cycle (employer view)
- Receive updated RPNs from Revenue (auto via software)
- Capture hours, overtime, additions, deductions and BIK
- Run the payroll; verify net pays look right
- Submit PSR to Revenue on or before pay date
- Distribute payslips to employees (legally required)
- Pay net wages by bank transfer
- By the 23rd of the following month: pay PAYE/PRSI/USC total to Revenue
- Reconcile payroll control accounts in the books
Common error: not updating BIK for company-vehicle benefit when the CO₂-based rates change each January. Underreporting BIK can trigger employer-PRSI uplift and PAYE assessments going back four years.
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