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Ireland

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The labour market in Ireland

Each labour market has some peculiarities. It may be tricky for foreigners to fully understand the payment methods, the taxes and other benefits related to them. In TalentUp, we are starting a series of different blog articles, one for each country. This article analyses the labour market in Ireland.

General data about the Irish labour market

Irish minimum wage and maximum working hours disclosure. Data for January 2024. Source: https://www.papayaglobal.com/countrypedia/country/ireland/

Payroll taxes in Ireland

Social security contributions are made by the employer and the employee and are used for funding unemployment, pension, maternity/paternity leave, and sickness or injury.

Share of contingencies applied to the gross salary. Data source: https://www.papayaglobal.com/countrypedia/country/ireland/

Once contributions are paid, employees need to pay an income tax that varies depending on their gross salaries. 

Contingencies from self-employees

As a self-employed person, you pay income tax under the self-assessment system once a year. Self-assessment means that you are responsible for making your own assessment of the tax due.

Example of net salary in Ireland

As a reference, we use the average salary of a software engineer. In Ireland, on average, software engineers earn 50,300€ annually.

From gross to net salary of a software engineer in Ireland.

The employer contributes 7,545€ to social security, and the employee contributes 5,558.15€.

After paying the income tax, the employee has a net salary of 34,204€, coming from a gross salary of 50,300€.

Unemployment regulation in Ireland

Both the employer and the employee should give notice as follows:

Notice periods in Irish contracts. Data source: https://www.papayaglobal.com/countrypedia/country/ireland/

Payment can be made in lieu of notice.

Severance is payable only to redundant employees with 2 years’ service at the rate of 2 weeks’ pay per year of service plus an additional week’s pay. Pay is capped at EUR 600 per week.

The probation period goes from 3 months to 1 year.

Different kinds of leaves in Ireland

The minimum number of vacation days is 20. Part-time workers’ entitlement is calculated as 8.00% of the hours worked, subject to a maximum of four working weeks per leave year.

There are 9 public holidays in Ireland.

The workers have the right to receive 3 days of sick pay per year. It is 70% of normal pay, paid by the employer, with a maximum of 110€ daily. By 2026, they will be entitled to 10 days of sick pay per year.

There are also three days of paid bereavement leave. 

Employers must provide their full-time, regularly employed employees with job-protected and unpaid leave for their duty as jurors, as witnesses in a case, or as plaintiffs or defendants in the courts.

Paid parental leave

Mothers are entitled to 26 (156 days) weeks of maternity leave and can receive an extra 16 weeks of unpaid leave, which begins immediately after the end of maternity leave. Mothers must take at least two weeks before the expected birth and at least four weeks after.

The weekly standard rate of the maternity benefit is 262€.

Fathers are entitled to seven weeks of paternity leave that can start any time in the first six months after birth, or placement in the case of an adoption. it is paid by PRSI.

Parents are entitled to up to 26 weeks of unpaid parental leave for each eligible child before 12 years old. 

Other common Irish benefits

Top 5 benefits offered by Irish companies. Datasource: TalentUp’s database.

How to employ an Irish worker

Companies that want to hire in Ireland should have a legal entity there. I mean registering in the Companies Registration Office (CRO= and opening a business bank account. The next step is to sign up with Ireland’s Revenue Online Service where they’ll be required to register for taxes like VAT, Pay As You Earn (PAYE), and the Relevant Contracts Tax (RCT).