What is PAYE (Ireland)?
Pay As You Earn is the system Irish employers use to deduct income tax, PRSI and USC from employee wages and pay them to Revenue in real time. Since 2019, Ireland has operated under PAYE Modernisation, requiring employers to report payroll on or before each pay date.
Current Rate (1 January to 31 December)
20% standard rate up to €44,000 (single), 40% above. Plus PRSI and USC.
Example
An Irish employee earning €50,000 pays approx. €8,800 income tax, €2,000 PRSI (4%) and €1,025 USC, leaving roughly €38,175 net (before tax credits).
How PAYE (Ireland) works in Ireland
Under PAYE Modernisation, every payroll run generates a Payroll Submission Request (PSR) to Revenue before the employee is paid. Revenue then calculates the next month's PAYE/PRSI/USC liability and provides a statement. Employers must remit this through ROS by the 14th (paper) or 23rd (ROS) of the following month.
The standard rate cut-off and tax credits depend on each employee's circumstances and are communicated to the employer via a Revenue Payroll Notification (RPN). Directors of close companies generally cannot use the PAYE Tax Credit on salary from their own company.
Related terms
Pay Related Social Insurance funds Ireland's Social Insurance Fund. Most employees pay Class A1 PRSI at 4.1% (rising to higher rates over time), and employers pay 11.05% on weekly pay above €441, or 8.9% below. Self-employed people typically pay Class S at 4.1%.
The Universal Social Charge is an Irish tax on gross income (with limited exemptions). Rates are banded: 0.5% on the first €12,012, 2% to €25,760, 3% to €70,044, and 8% above. Self-employed people earning over €100,000 pay an extra 3% surcharge.
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