What is PRSI (Ireland)?

PRSI (Pay Related Social Insurance) is a compulsory social insurance contribution paid by employees, employers, and self-employed people in Ireland. It funds the Social Insurance Fund, which pays benefits including Jobseeker's Benefit, Illness Benefit, Maternity Benefit, State Pension (Contributory), and other social welfare payments. Entitlement to these benefits depends on having sufficient PRSI contributions (paid weeks) recorded on your social insurance record.

**PRSI classes and rates**

The most common class is Class A, paid by most employees in the private sector, public servants hired after 1995, and non-proprietary company directors. Class A breaks into several subclasses:

- **Class A1**: employee weekly pay above €441. Employee rate: 4.1%. Employer rate: 11.15%. - **Class A0**: employee weekly pay between €38 and €441. Employee rate: 4.1%. Employer rate: 8.9%. - **Class AX/AL**: as for A1 but for employees in certain VHI-exempt employments.

Class S applies to self-employed individuals including sole traders, proprietary directors (who own 15%+ of the company), and certain rental/investment income earners. The Class S rate is 4.1% on all income, with a minimum annual contribution of €650 (for income under €15,875).

Class D applies to established civil servants and some public servants employed before April 1995. It has a lower employee rate (0.9%) but provides fewer benefits.

Class J applies to employees earning less than €38 per week, regardless of age. It covers occupational injuries only.

**The employer PRSI rate increase (2024-2025)**

From 1 October 2024, the employer PRSI rate for Class A1 increased from 11.05% to 11.15%, and from 1 October 2025 it will increase again to 11.25%. These incremental increases form part of the government's programme to fund the auto-enrolment pension system (Automatic Enrolment Retirement Savings System, launching 2025). Employers should ensure payroll software reflects these rates.

**What PRSI contributions fund (and what they don't)**

Class A contributions give entitlement to the widest range of social insurance benefits, including: - Jobseeker's Benefit (after 6 months of Class A contributions) - Illness Benefit (104 weeks per claim, after 13 paid weeks) - Maternity / Paternity / Parent's Benefit - State Pension (Contributory) — requires 520+ paid weeks - Invalidity Pension - Treatment Benefit (dental and optical)

Class S contributions (self-employed) provide fewer benefits — notably, self-employed people cannot claim Jobseeker's Benefit if their business ceases. They are entitled to Illness Benefit from 2017, State Pension (Contributory), and treatment benefit, but not Maternity Benefit (this is accessed through a different mechanism for self-employed mothers via a class S entitlement introduced in 2017).

**PRSI vs employer payroll costs**

Employer PRSI is a significant employment cost on top of gross salary. For a €50,000 salary (approximately €961 per week), employer PRSI at 11.15% adds approximately €5,575 per year to the total employment cost. When budgeting for a hire, total payroll cost = gross salary + 11.15% employer PRSI (plus employer pension contributions if applicable).

**PRSI for company directors**

A proprietary director (who owns 15% or more of company share capital) pays Class S rather than Class A, even if they receive a salary through PAYE. This is important to understand because Class S provides fewer benefits. Non-proprietary directors (who own less than 15%) pay Class A1 on their salary income.

**Checking your PRSI record**

Every individual can view their PRSI contribution history through myAccount on Revenue's online service. A full State Pension (Contributory) requires 520 paid weeks — it is worth checking your record periodically to identify gaps, particularly if you have been self-employed, on a career break, or living abroad.