Hire employees in Ireland
Everything a foreign company needs to know before employing people in the Republic of Ireland: whether you need an entity, what an employee really costs, how PAYE and PRSI work, what leave is mandatory, and why the one-year dismissal threshold and the Karshan contractor test matter. Written for CHROs, CFOs, General Counsel and founders.
Quick answers
The questions leadership teams ask first, answered directly. Detail follows below.
Do I need a local Irish entity to hire?
No. Foreign companies can engage talent in Ireland through three routes:
- Employer of Record. Dryft Global is the legal employer in the Republic of Ireland. Dryft runs payroll under Revenue's PAYE Modernisation system, pays employer PRSI, issues the local contract, delivers mandatory benefits and keeps HR compliant with the Workplace Relations Commission (WRC). You direct the day to day work.
- Direct local entity (LTD, DAC or branch). You incorporate with the Companies Registration Office (CRO), register as an employer with the Revenue Commissioners and run Irish payroll yourself.
- Independent contractor (B2B agreement). Lawful only for genuinely autonomous sole traders or contractor companies doing project work. Since the Supreme Court's Karshan ruling, integrated full-time contractors are a reclassification risk. See the contractor section below.
When should I use an EOR instead of setting up an Irish LTD?
An EOR makes commercial sense when you are:
- Hiring engineers, sales leads or operations staff in days rather than waiting on CRO incorporation and a bank account.
- Testing the market or running a distributed team of 1 to 15 knowledge workers.
- Avoiding direct PRSI liability, payroll filing risk and permanent establishment triggers.
A direct entity becomes the right answer when headcount grows past 15 to 20, when Ireland is your European headquarters or IP holding vehicle, when you need Central Bank of Ireland regulation, or when you want IDA Ireland grants, commercial leases or direct local client contracts.
What does an employee actually cost beyond salary?
Ireland has one of the lowest statutory employer burdens in Western Europe. Employer PRSI Class A is 11.05% on earnings above €441 a week, including the 1% National Training Fund Levy. Add a small reserve for statutory sick pay and the new pension auto-enrolment contribution, which starts at 1.5% and rises to 6% over ten years, for a statutory baseline of roughly 13% to 18%. Competitive tech and HQ packages add 8% to 15% for a pension match, health insurance and life cover. Full breakdown below.
How difficult is termination in Ireland?
Moderate, but procedure matters more than most foreign employers expect. After 52 weeks of service the Unfair Dismissals Acts apply and a dismissal is presumed unfair unless you prove one of five fair grounds and a fair process meeting constitutional standards of natural justice. Statutory notice runs from 1 to 8 weeks. WRC awards can reach two years' gross pay, or reinstatement. Redundancy after two years costs two weeks' pay per year plus a bonus week, capped at €600 a week.
Can Dryft Global legally employ my team in Ireland?
Yes. Dryft acts as the legal employer of record in the Republic of Ireland. We issue the WRC-compliant contract and written terms, run real-time payroll through the Revenue Online Service, remit PAYE, PRSI and USC, administer statutory leave and provide pension access, while you direct the work. Northern Ireland is part of the UK and is covered by our separate UK guide.
Hiring routes compared
Foreign companies have to balance speed, compliance exposure and corporate tax presence. Here is how the three routes stack up.
| Factor | Direct entity (LTD / DAC) | Dryft Global EOR | Independent contractor |
|---|---|---|---|
| Speed to onboard | 4 to 8+ weeks (incorporation, bank, PREM registration) | 2 to 5 business days | 1 to 3 business days |
| Setup cost | High: €3,000 to €8,000+ legal, CRO and tax setup | No capital outlay | None |
| Misclassification risk | None, direct employment | None, Dryft is the legal employer | Severe under the Karshan five-step test |
| Permanent establishment | Direct corporate tax presence (12.5% / 15%) | Mitigated by contractual insulation | Medium to high if acting as your agent |
| Best fit | European HQ leadership and long-term hub | Strategic tech, sales and regional talent | External, temporary, specialised projects |
What an employee costs in Ireland
Ireland funds its social system through Pay Related Social Insurance (PRSI), a single employer rate rather than separate pension, health and unemployment funds, which is why the statutory burden is low. Pension auto-enrolment (My Future Fund) adds a phased contribution for staff aged 23 to 60 earning €20,000 or more who are not in a qualifying scheme.
| Component | Employer share | Notes |
|---|---|---|
| Employer PRSI (Class A) | 11.05% | On weekly earnings above €441; 8.8% at or below. Includes the 1% National Training Fund Levy |
| Statutory sick pay reserve | ~0.5% to 1.0% | 5 days a year at 70% of pay, capped at €110 a day |
| Pension auto-enrolment | 1.5% rising to 6.0% | Phased over 10 years, on earnings up to €80,000; state adds a top-up |
| Statutory subtotal | ~13% to 18%+ | Of gross base pay, before market benefits |
| Occupational pension match | 5% to 8% | Market standard in tech and HQ roles; replaces auto-enrolment |
| Health, life and income protection | ~5% to 8.5% | Private health cover of €1,200 to €2,500 a year plus 4x salary death in service |
| Total employer on-cost | ~22% to 32%+ | Above base salary, competitive tech or HQ package |
For an employee on €70,000 gross, budget roughly €79,000 to €82,500 on statutory costs alone, and €85,000 to €92,000 with a competitive benefits package. Ask us for a cost model with current thresholds applied.
Payroll and tax
Ireland runs payroll in real time. Before each pay run you pull a live Revenue Payroll Notification (RPN) for every employee through the Revenue Online Service (ROS), which sets their tax credits, rate band cut-off and USC bands. You calculate gross to net, then send a Payroll Submission Request (PSR) to Revenue on or before pay day. Revenue issues a statement on the 5th of the following month and the balance is settled by the 23rd. Salaried staff are paid monthly to a bank account with an itemised payslip. Keep records for six years.
PAYE, USC and PRSI
Income tax has two rates. A single person pays 20% on the first €42,000 and 40% on the balance; the band is wider for married one-income couples. Liability is reduced by tax credits, typically €1,875 personal and €1,875 employee. The Universal Social Charge (USC) is a separate employee levy: 0.5% on the first €12,012, 2% to €25,760, 4% to €70,044 and 8% above. Employee PRSI is 4%, exempt up to €352 a week.
National minimum wage
Ireland sets a single national adult hourly minimum wage under the National Minimum Wage Act 2000, reviewed each year by the Low Pay Commission and enacted by ministerial order, with a commitment to move it toward 60% of median earnings. Workers aged 19 receive 90%, aged 18 receive 80% and under 18 receive 70% of the adult rate. Expenses, discretionary bonuses and overtime premiums do not count. Some sectors have binding Sectoral Employment Orders setting higher floors.
Leave and mandatory benefits
- Paid annual leave. 4 working weeks (20 days on a 5-day week) under the Organisation of Working Time Act 1997. Accrual is calculated three ways, including 8% of hours worked, and the employee gets whichever is most favourable.
- Public holidays. 10 a year, including St Brigid's Day. For each one you owe a paid day off, a paid day within a month, an extra leave day or an extra day's pay.
- Statutory sick pay. 5 paid days a year at 70% of pay, capped at €110 a day, after 13 weeks of service and with a medical certificate. Expansion to 7 and then 10 days is planned.
- Maternity. 26 weeks of leave funded by state Maternity Benefit of around €274 a week, plus 16 weeks unpaid. Employers commonly top up. Adoptive leave is 24 weeks paid plus 16 unpaid.
- Paternity, parent's and parental leave. 2 weeks of state-funded paternity leave. 9 weeks of state-funded parent's leave per parent in the child's first two years. 26 weeks of unpaid parental leave per child under 12.
- Other protected leave. 3 days of paid force majeure leave, 5 days of paid domestic violence leave, 5 days of unpaid medical care leave, up to 104 weeks of unpaid carer's leave.
- Pension access. Without an occupational scheme you must offer a Standard PRSA through payroll deduction, and eligible staff fall into national auto-enrolment.
- Working time. 48 hours a week averaged over 4 months, 11 hours of daily rest, 24 hours of weekly rest. Sunday work carries a premium; overtime does not unless the contract says so. Keep daily working time records (Form OWT 1) for WRC inspection.
- Remote work. After 6 months employees can request remote work. You must answer within 4 weeks and refuse only on genuine business grounds.
Termination and notice periods
Probation is capped at 6 months, extendable to 12 only in exceptional cases. Once an employee has 52 weeks of service the Unfair Dismissals Acts 1977 to 2015 apply and every dismissal is presumed unfair until you prove otherwise. The five fair grounds are capability, conduct, genuine redundancy, statutory restriction and other substantial grounds. Substance is not enough: the Constitution requires natural justice, so the employee must know the case against them, be heard, have representation and be able to appeal, following the statutory disciplinary code (S.I. 146/2000).
| Continuous service | Statutory minimum notice (Minimum Notice Act 1973) |
|---|---|
| 13 weeks to 2 years | 1 week |
| 2 to 5 years | 2 weeks |
| 5 to 10 years | 4 weeks |
| 10 to 15 years | 6 weeks |
| 15 years or more | 8 weeks |
- Contractual notice wins if longer. Professional contracts normally set 1 to 3 months.
- Remedies are heavy. The WRC or Labour Court can award up to 104 weeks' gross pay, or order reinstatement or re-engagement.
- Redundancy formula. After 104 weeks of service: 2 weeks' pay per year plus 1 bonus week, on a weekly pay cap of €600. Tax free for the employee.
- Collective redundancies. Triggered by 5 dismissals in a workforce of 21 to 49, 10 in 50 to 99, 10% in 100 to 299, or 30 in 300 or more, within 30 days. You must notify the Minister and consult representatives for 30 days before any notice is served.
- Settlement agreements. Enforceable only where the employee has independent advice from a practising Irish solicitor.
Can I use independent contractors?
Only for people genuinely in business on their own account. In 2023 the Supreme Court in Revenue Commissioners v Karshan (Midlands) Ltd reset Irish employment status law, now written into the Code of Practice on Determining Employment Status. The five-step test asks whether work is exchanged for pay, whether there is a genuine right of substitution, how much control you have over how, when and where it is done, whether the person carries real profit and loss risk, and whether the overall context points to employment. The label is irrelevant. If a contractor is reclassified you owe employer PRSI at 11.05% for the whole engagement plus interest and penalties, back holiday pay at 8% of hours worked, public holiday and sick pay and, past 52 weeks of service, unfair dismissal exposure of up to two years' pay. Deliberate misclassification can be criminal. An EOR is the compliant alternative for anyone who works like an employee.
The legal framework in brief
Irish employment law mixes common law, constitutional rights to fair procedures, Acts of the Oireachtas and EU directives. Disputes go to the WRC, with appeals to the Labour Court. The statutes you will hear referenced most:
- Terms of Employment (Information) Act 1994. Core written terms within 5 days, the full statement within 1 month, probation capped at 6 months.
- Organisation of Working Time Act 1997. The 48-hour week, rest breaks, Sunday premium, annual leave and public holidays.
- Unfair Dismissals Acts 1977 to 2015. Protection after 52 weeks, the five fair grounds and procedural fairness.
- Redundancy Payments Acts 1967 to 2022 and Protection of Employment Act 1977. Statutory redundancy lump sums and 30-day collective consultation.
- Employment Equality Acts 1998 to 2015. Nine protected grounds, reasonable accommodation for disability and gender pay gap reporting for employers with 50 or more staff.
- Work Life Balance and Miscellaneous Provisions Act 2023. The right to request remote and flexible working, medical care leave and paid domestic violence leave.
- Safety, Health and Welfare at Work Act 2005. A written Safety Statement, risk assessments and DSE assessments for home workstations.
- Data Protection Act 2018 and GDPR. Consent is not a valid basis in employment; monitoring needs an impact assessment and a written policy; covert surveillance is unlawful.
Where the talent is
Ireland is the only English-speaking common-law jurisdiction in the Eurozone, and Dublin hosts the EMEA headquarters of most of the world's largest technology companies. That produces a deep pool of product managers, multilingual sales leaders, architects and compliance specialists. EU and EEA citizens need no permit, and British citizens work freely under the Common Travel Area. Non-EEA hires need a Critical Skills or General Employment Permit, with minimum salaries of €38,000 or €64,000 and €34,000 respectively, and at least half your Irish workforce must be EEA or UK citizens.
| Region | Talent and industry concentration |
|---|---|
| Greater Dublin | European tech HQs (Silicon Docks), SaaS, fintech, international banking, data centres, AI R&D, cyber security, legal operations |
| Cork | Pharmaceuticals, biotech, medical devices, enterprise software, supply chain, cloud infrastructure |
| Galway and the west | Medtech, biomedical engineering, marine sciences, gaming, distributed software teams |
| Limerick, Shannon and Waterford | Aviation leasing, shared services, financial back office, microelectronics, telecoms R&D |
| Dundalk and Drogheda (M1 corridor) | Cross-border logistics, enterprise IT, agri-food tech, embedded systems |
Ireland Implementation Kit
This page tells you the rules. The kit tells you what to do, in what order, and what goes wrong when you skip a step.
- Step-by-step implementation checklist, from hiring route selection to first Payroll Submission Request
- The Karshan five-step test as a decision tree for contractor engagements
- Day 5 and Month 1 written terms templates with probation capped at 6 months
- ROS digital certificate setup and live RPN retrieval before the first pay run
- PRSI Class A and USC configuration, PRSA access or auto-enrolment steps
- Statutory sick pay tracking and Form OWT 1 working time records
- Remote work policy, DSE assessment and GDPR privacy notice
- Right to work checks and employment permit routes, including the 50:50 rule
This guide is general information, not legal, tax or immigration advice. It covers the Republic of Ireland only. Irish employment, tax, PRSI and pension rules change through annual Budgets, EU directives and WRC and court decisions. Confirm current figures with a qualified adviser or with Dryft before acting. Last reviewed September 2026.
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