How do I register for PAYE as an employer in Ireland?

## How Do I Register for PAYE as an Employer in Ireland?

Once you hire your first employee, you become a PAYE employer and must register with Revenue, deduct and remit income tax, USC, and PRSI from your employees' pay, and file regular returns. Failing to register before paying any employee is a Revenue compliance breach.

## Step 1: Register as an Employer with Revenue

For sole traders and partnerships: Register using Form TR1 through Revenue Online Service (ROS). If you are already registered for income tax or VAT, you can add PAYE employer status through ROS by updating your existing registration.

For companies: Register using Form TR2 through ROS. If the company already has a corporation tax registration, add PAYE employer status to the existing record.

Required information: - Business name and address - PPS number (sole traders) or company registration number - Date from which you will be paying employees - Expected number of employees

Revenue typically processes PAYE employer registrations within 3-5 working days. You will receive an employer tax reference number.

## PAYE Modernisation: Real-Time Reporting

Ireland operates a real-time PAYE reporting system (PAYE Modernisation) which has been in effect since 1 January 2019. Under this system:

• You must report payroll to Revenue **on or before** each pay date (not retrospectively)
• Reports are submitted via **Revenue Payroll Notifications (RPNs)** which employers download before each payroll run
• Employees' tax credits and USC cut-offs are embedded in the RPN, so you do not need to manually enter allowances

You need either Revenue-approved payroll software or an approved payroll bureau to operate PAYE Modernisation correctly.

## PRSI Classes

Payroll taxes in Ireland include employer PRSI (a cost to the employer) and employee PRSI (deducted from the employee's pay). The class depends on the employee's type of work:

| PRSI Class | Employee Type | Employer PRSI Rate | |------------|---------------|-------------------| | A1 | Most employees (private sector, full-time) | 15% | | A1 | Weekly earnings above €500 (lower threshold) | 15% | | S | Self-employed, company directors (sole trader-style) | 0% (paid personally) | | J | Low-paid employees under €38/week, employees over 66 | 0.5% employer | | D | Civil service pensioners | N/A |

For most standard employees, Class A1 applies: employer PRSI of 15% and employee PRSI of 4% on earnings above €352 per week.

The 15% employer PRSI is a significant cost on top of salary. Paying a gross salary of €50,000 costs the employer €57,500 when employer PRSI is included.

## Filing the Monthly P30 Return

As a PAYE employer, you must file a P30 return every month (or quarterly for very small payrolls) through ROS, reporting:

• Total income tax deducted from employees
• Total USC deducted
• Total employee PRSI deducted
• Total employer PRSI due

Payment of all these amounts is due by the 23rd of the month following the payroll period for online filers.

For example, January's payroll taxes are due by 23 February.

## PAYE for Company Directors

Company directors who are proprietary directors (owning more than 15% of shares) are treated differently from standard employees:

• PRSI Class S applies (not Class A): no employer PRSI (0%), but the director pays PRSI at 4% as if self-employed
• Income may also be subject to self-assessment preliminary tax obligations
• If the director is also a controlling director, Revenue may scrutinise the split between salary and dividends

## Annual P35 End-of-Year Return

The P35 is the annual end-of-year PAYE return, due by 15 February of the following year for online filers. It reconciles the monthly P30 returns with the total tax deducted from all employees across the year.