How To Hire And Pay Employees In Ireland

When exploring international expansion options in Europe, Ireland should not be disregarded. With English as its official language, a strong geographic position, and an emerging economy, it undoubtedly presents itself as a good expansion territory.

Ireland is among the leading European countries in technology, tourism, history and culture, with over six hundred thousand foreigners living in the country (10%+ of the population). Expats benefit from its welcoming local employment rules and low corporate taxes.

Ireland is also home to numerous companies’ European headquarters such as Google, Ryanair, IBM, Intel, Pfizer and Twitter.

Though it is an attractive prospect for businesses, setting up operations here can be a lengthy and costly process and the tax payment procedures are also complicated.

Employee costs in Ireland are expected to be 10-15% of their salary.

Mandatory Benefits

Irish employers are required to offer the following benefits to all full-time employees.

• Retirement Contributions (Pension Contributions)

• Pay Related Social Insurance (PRSI)

• Paid Annual Leave Entitlements

Additional

Some employers like to offer additional benefits to improve employee retention and satisfaction such as:

• Private Health Insurance

• Income Protection Insurance

• Life Assurance

• Dental and Vision Plan

• Stock Options

• Fitness Benefits

Contracts 

Anyone who works for an employer automatically has a contract of employment. The contract as a whole does not have to be in writing, but the employee must be provided with a written statement of terms of employment. 

 An employer must provide the following in a contract:

• Names of employer and employee
• Employer address
• Job Title
• Place of Work
• Start Date
• Expected duration of contract 
• Pay and Pay rate 
• Hours of work 
• Paid Leave 
• Sick Pay 
• Pension
• Probation and notice periods
• Collective Agreements

The standard trial period, known as the probation period, should not exceed six months. The probation period may only be extended on an exceptional basis, where it is in the best interests of the employee.

Healthcare

Ireland has a comprehensive, government funded public healthcare system. A person living in Ireland for at least one year is considered by the HSE to be ‘ordinarily resident’ and is entitled to either full eligibility (Category 1) or limited eligibility (Category 2) for health services. Many Irish employees also choose a Private Health Insurance, which offers a more rapid access to treatments and a wider choice in doctors and hospitals.

Social Security

The Irish social security system is known as Pay Related Social Insurance (PRSI) and is, like the name states, dependent on the income, but also on the type of work an employee is performing. Most employees are insured under Class A category. Employers will pay a 11.05% contribution for employees on a Class A category with earnings over €410 per week and 8.8% for earnings below €410 per week. Contributions will make an employee eligible for benefits such as Job Seekers, Maternity, Paternity, Illness Benefit.  

As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:

• Passport
• Personal Details - Name, DOB, Address, Phone Number, Email Address
• PPS Number
• Pension Scheme Preference
• Allergies and Illnesses
• Bank Details
• Criminal record and bankruptcy declaration 
• Emergency Contact Information
• Medical or physical conditions, treatment and medication
• Blood Group
• DSE Assessment form

An employee may unilaterally terminate their employment by providing written notice to their employer. During a probation period this is usually one week for both the employee and employer. This will be stated in the contract of employment. There is no statutory notice period for employees who have worked less than 13 weeks for an employer. After 13 weeks, the notice period an employee is required to provide will be stated in the contract of employment. If the contract of employment does not state a required notice period, then this will be the statutory minimum of one week. The most common notice period an employee is required to provide is one month's written notice. More senior level employees may have a longer notice period written into their contract, such as two or three months.

Once an employee has worked for an employer for over 12 months continually, they may only have their employment terminated on the grounds of one of the following:

• Personal, e.g lateness, absenteeism
• Competence
• Qualifications
• Conduct
• Redundancy
• Other substantial grounds.

To mitigate any risk to the employer, it is imperative that there is a burden of proof or evidence and that the required investigation meeting and/or disciplinary hearings have taken place.

If an employer wishes to terminate an employee, the following notice periods will need to be followed in line with their length of service. Many employers choose to provide employees with one month's notice after their probation period ends.

Notice periods can sometimes be bypassed in certain cases of misconduct and gross misconduct.

It is important that a fair process takes place for any dismissal cases. After an employee has been with an employer for a period of 12 months’ continuous service, they have the right to refer to the Unfair Dismissal Act 1977, which prevents employees from being dismissed without fair cause and process. This would then be referred to the Workplace Relations Commission and, if necessary, the Labour Court to make a claim against the employer.

Annual Leave

Full time employees are entitled to a statutory minimum of four working weeks’ annual leave (usually 20 days for full time staff). Annual leave is calculated on a pro rata basis for part-time employees. Annual leave should be used in the agreed 12-month annual leave period. However, many employers allow days to be carried over, that must then be used within the first six months of the following year.

Public Holidays

There are 10 public holidays that employees are entitled to. If an employee works on a public holiday, they are entitled to a day’s pay or additional days leave in lieu. Public holidays are calculated on a pro rata basis for part-time employees. 

• New Year's Day
• Saint Patrick's Day
• Easter Monday
• May Bank Holiday
• June Bank Holiday
• August Bank Holiday
• October Bank Holiday
• Christmas Day
• Saint Stephen's Day 

Minimum Wage

The minimum wage for employees aged 20 and over in Ireland is currently €10.50 per hour. Every January, this is increased by the Irish Government. The minimum wage for employees ages 19-20 is €9.45 per hour and aged 18-19 is €10.

Working Time and Overtime

The average working week in Ireland is 39 hours. The maximum number of hours an adult can work is 48 hours per week. There are some exceptions such as the Gardaí, defence forces, employees who control their own working hours and family employees on farms. There are special conditions for employees who work on Sundays. An employer must either provide a reasonable allowance, reasonable pay increase or reasonable paid time off work. With regards to overtime, there is no legal right to pay for working extra hours and there are no statutory levels of overtime pay. However, many employers pay employees higher rates of pay for overtime.

Salary Payments

Salaries are typically paid on either a monthly or fortnightly period. Employers should pay employees by the last day of the month.

Income Tax

The Irish tax year runs from January to December. Employees pay tax through a Pay-As-You-Earn (PAYE) system which is deducted from wages by employers before net payments are made to employees. Below is a table of tax thresholds for 2023.