Income tax is calculated based on a tax rate band. The individual income tax is 20% until a certain level of income and 40% for any amount above that income. 20% is known as the standard band rate whereas the 40% is known as the higher band rate. The amount of income at the different tax rate bands is dependent on marital status.

Income tax is calculated by:

• Applying the standard rate of 20% to the income in your weekly rate band
• Applying the higher rate of 40% to any income above your weekly rate band

The employer cost is generally estimated at 11.05% of the employee salary.

• Social Security - 11.05%

Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday. The maximum hours are 48 hours per week.

Overtime payment is not mandatory. Hours outside of standard work hours are considered overtime. 

The maximum average weekly working hours (including overtime) over a 4 month period cannot exceed 48 hours. 

There is no statutory overtime pay, and overtime compensation is based on the employment agreement. Employers can provide compensation financially or provide paid time off at a future date.

Pregnant employees who qualify for maternity leave are entitled to 26 weeks of paid leave.

The employee will receive a percentage of their salary based on employment history and amount of social insurance paid, where the maximum amount (full-rate maternity benefit) amounts to €245 per week. The PRSI will be responsible for the pay.

The employee can extend leave for 16 additional days. This leave is unpaid.

To qualify, an employee must meet one of the following conditions:

• Must have at least 39 weeks PRSI paid in the 12 months before the first day of maternity leave
• At least 39 weeks PRSI paid since first starting work and at least 39 weeks PRSI paid or credited in the Relevant Tax Year or in the year following the Relevant Tax Year
• At least 26 weeks PRSI paid in the Relevant Tax Year and at least 26 weeks PRSI paid in the Tax Year prior to the Relevant Tax Year

Employees in Ireland are entitled to 3 days of company-paid sick leave at 70% of their regular salary up to a maximum of €110/day. From 2024 onwards, employees in Ireland will be entitled to 4 days of company-paid sick leave. If the employee is off work sick for more than 3 days, and they have enough PRSI contributions, they can apply to the Department of Social Protection (DSP) for a payment called Illness Benefit.
The sick leave entitlement will increase in the coming years:
- 2023: 3 days
- 2024: 5 days
- 2025: 7 days
- 2026: 10 days

Sick leave is not prorated. Part time employees are entitled to the same allowance.

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Termination in Ireland can be complex and must be based on performance or redundancy reasons (serious cause, unfit for the role, extinction of the role).

Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• Unilaterally by the employer based on:
  • Probation period
  • Objective grounds
  • Disciplinary dismissal (Gross misconduct, fraud, repeated breach of rules)
  • Performance due to unsuitability for the job
  • Physically or mentally incapable of performing duties
  • Ceases to be eligible to work in Ireland
• By the expiration of the contract

The minimum notice period is 1 week and will be increased according to the length of the employment.

• Between 13 weeks to 2 years of employment - 1 week of notice
• Between 2 to 5 years of employment - 2 weeks of notice
• Between 5 to 10 years of employment - 4 weeks of notice
• Between 10 to 15 years of employment - 6 weeks of notice
• More than 15 years of employment - 8 weeks of notice

In Ireland, employers can make a payment in lieu of notice. 

The employer may terminate the employee without giving the employee full notice and instead pay the base salary which the employee would have been entitled to receive during the notice period (or if notice has already been given, during the remainder of the notice period).

In eligible cases of termination, severance is paid depending on the employee's salary and length of employment.

Severance equals 2 weeks of base pay for every year of employment (pro-rata) plus 1 additional week's pay up to a maximum of €600 per week.

To protect you from unforeseen financial risks arising from terminations, Deel applies a Severance Accrual to all employment agreements in this country.  Deel has extensive expertise in managing litigation risk globally and our Severance Accrual calculation is based on the prevailing common-law or statutory entitlements and local best practices. In the event your employee resigns or is not entitled to severance, all unused amounts will be returned to you.

Ireland celebrates 10 national holidays. National public holidays include:

1. New Year’s Day: January 1
2. St. Brigid's Day: February 6
3. Saint Patrick’s Day: March 17
4. Easter Monday
5. Early May Bank Holiday: First Monday in May
6. June Bank Holiday: First Monday in June
7. August Bank Holiday: First Monday in August
8. October Bank Holiday: Last Monday in October
9. Christmas Day: December 25
10. Saint Stephen’s Day: December 26

Contracts must be in English and can be translated to another language (employee's native language if required). They must be in writing and signed by both parties.

A contract must include:

• Name
• Address of employee
• Start date and finish date
• Place of work
• Salary (Rate of pay)
• Working hours
• Annual holiday entitlement
• Method of payment
• Sick Leave
• Notice Period
• Overtime rates (if any)
• Bonus (if any)
• Other general contractual obligations (disciplinary procedures, harassment policies, smoking / vaping, use of company equipment/phones, etc.)