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Employer of Record in Ireland

Employer of Record in Ireland

An Employer Of Record service like Skuad can help companies grow and expand into new territories. With a vibrant economy and a low corporate tax rate, Ireland is a fantastic place for a company to hire talent and operate. However, it is not easy to hire employees or set up operations remotely, as there are several laws and regulations that need to be taken into account. One also needs to consider payroll taxes, workers’ compensation, liability insurance, employers’ contribution to pension funds, etc. Companies can take advantage of Employers Of Record (EOR) organizations like Skuad, whose services unburden them from such issues so that they can focus on core business functions.

Ireland at a Glance

Estimated population: 4.49 million

Currency: Euro

Capital: Dublin

Languages spoken: Irish and English

GDP: $89,818 (PPP)

Employment In Ireland

Ireland’s GDP per capita is one of the highest in the world. The reason for this is the low corporate taxes that have attracted big companies there. These companies often set up their headquarters there, and all economic activities and underlying intellectual property are connected to these headquarters. However, there is significant wealth inequality in Ireland, and the minimum wage is just €10.20 per hour. 

Ireland’s laws come into operation even before employment begins. The employer is prohibited from misrepresenting the terms of employment in job advertisements or during the interview process. Doing so can result in lawsuits. Moreover, employers have to comply with regulations pertaining to equality and access to employment when looking for candidates. 

Ireland does not have a consolidated labor law. Instead, it has several labor laws which govern different industries and aspects of employment. The Payment of Wages Act, 1991 enumerates the approved method of making payments for employers. The Maternity Protection Act of 1994 and 2004 guarantees 26 weeks of maternity leave for expecting mothers.

Title Explanation
Employment Equality Acts 1998-2015 This Act prohibits discrimination based on nine grounds, namely: age, disability, family status, gender, race, religion, sexual orientation, and membership of the traveler community. It promotes equality, bans sexual harassment in the workplace, and enables employers to take positive actions to ensure equality.
Payment of Wages Act, 1991 The Payment of Wages Act gives employees the right to get a payslip that contains the amount of gross salary and any deductions to be paid. It enumerates the approved methods of payment to employees. Deductions from pay are only allowed in specified circumstances, such as when it is required by law, provided for in the terms of employment, towards pension, etc.
Safety, Health, and Welfare at Work Act 2005 This Act enhances the responsibility of employers, employees, the self-employed, and other parties towards creating a safe workplace for all. It fixes the roles and responsibilities of the health and safety authorities. It contains the health and safety guidelines for workplaces along with penalties for different safety violations.
Minimum Notice & Terms of Employment Act 1973 - 2005 Employees have the right to get a minimum of one week’s notice before they are terminated. The minimum notice period increases with the tenure of the employee. Employers are not obliged to give notice only in cases of misconduct or when the employee has worked for less than 13 weeks.

Companies need to ensure that they are aware of and comply with the relevant labor laws. Alternatively, they can leave this to an organization like Skuad that takes care of employee payments, payroll taxes, compliance issues, and other relevant matters. For payroll services in Ireland, click here.

Entitlements Explanations
Statutory Working Hours The standard work hours in Ireland are 39 hours per week. According to legislation, the total working hours must not exceed 48 hours in a week. This is in line with the European Working Time Directive.
Sick Leave There is no sick leave policy in Ireland, and most employers decide on the sick-leave policies. Moreover, employees have to get a medical certificate from a certified GP to get sick leave instead of deducting it from the annual leave.
Break Employees are entitled to get a 15-minute break after working for 4 hours and 15 minutes more after working for 6 hours.
Public Holidays The official public holidays in Ireland are:
  • The New Year (1st January)
  • St. Patrick’s Day (17th March)
  • Christmas (25th December)
  • St. Stephen’s Day (26th December)

    Employees do not need to work on public holidays. They get fully paid for the day. If they do work on a public holiday, they get extra pay. The quantum of the extra pay depends on their terms of employment.

Maternity Leave Expecting mothers can get 26-weeks of maternity leave. In addition to this, they can avail 16 weeks of unpaid leave.
Annual Leave Entitlement The Organisation of Working Time Act of 1997 provides for an annual leave of 4 weeks in a year. Employees can negotiate for more annual leave in their terms of employment.


Contractors vs. Full-time Employees

A standard employment contract for Ireland contains relevant information like gross pay, work hours, job responsibility, etc. An employee works under the terms of employment, whereas an independent contractor works under a contract of service. An employee usually gets more benefits than an independent contractor. The employment contract law of Ireland says that the latter can be termed as an ‘employee’ if the working relationship between the service provider and recipient is that of an employer-employee in substance.

Employees are entitled to certain benefits that independent contractors do not get. They have the right to annual leave, maternity benefits, and the right not to be terminated without justification, to name a few. 

In addition to this distinction, Irish law has different categories of workers. These are: 

1. Permanent Employees 

After the probation period, many employees get a permanent gig in the company, where they work for an indefinite period. Their employment status only changes when:

  1. They quit or change jobs.
  2. They are terminated for misconduct or breach of terms of employment. 

2. Fixed Term Employees

Employees who are working under a fixed-term contract are called fixed-term employees. Irish law prohibits discrimination against fixed-term employees or any favorable treatment to permanent employees over fixed-term employees. 

3. Zero-Hour Employees

According to The Organisation of Work Time Act 1997, zero-hour employees are those employees whose terms of employment say that they have to be available on-call or work a specified number of hours every week. According to the Employment (Miscellaneous Provisions) Act of 2008, it is illegal for employers to have zero-hour employees. 

Hiring In Ireland

The recruitment process in Ireland is just like that of any other developed economy. Candidates find jobs through recruitment agencies, social media, connections, and job websites. Recruitment agencies are a popular route for job seekers in Ireland. These agencies sift through the thousands of CVs they receive and try to match them with a job that will suit the candidates’ qualifications. A good thing about recruitment agencies in Ireland is that they cannot charge for their services. 

Job websites are a huge part of the job market in Ireland. They are efficient and open up plenty of opportunities for candidates. In recent years, many websites such as Careerbuilder, Irish Jobs, Monster, Recruit Ireland, etc., have facilitated the employment of millions of people in Ireland. 

The Government has also created organizations like the Local Employment Service Network (LESN) that helps job seekers in finding a job. Companies looking to hire employees in Ireland can use the services of an EOR like Skuad to handle the recruitment process for them. This saves precious time spent in the long-drawn process of hiring candidates and saves you from the complications of understanding Irish labor laws. The EOR takes care of everything from hiring to onboarding and all HR services. Contact Skuad for further information. 

Scope of negotiating terms

Ireland’s job market was in an excellent position before the COVID pandemic hit. After recovering from the global recession of 2008, its unemployment rate had fallen to just 5%. However, after the pandemic, things have taken a turn for the worse, and unemployment has risen sharply in the country. Experts have said that with the rollout of the vaccines, the job market is expected to recover significantly in the coming months. 

Employment contracts in Ireland are well negotiated by employees. With big companies arriving due to the low corporate tax rate, there is a huge demand for employees who are well versed in any STEM subject. Employers need to provide employees with a fair contract to attract excellent candidates. Potential candidates can drive a hard bargain, particularly if they are from a well-known university. 

In Ireland, there is not much scope for negotiation in blue-collar jobs. However, with the rising costs, millennials are challenging the status quo, and the discontent is growing slowly. In the coming future, we might see the new generations fighting to increase wages. 

Probation & Termination

The Unfair Dismissal’s Act does not come to the rescue of employees on probation until and unless they are removed from service for the following reasons:

  1. Avoiding payment of entitlements such as maternity leave or adoptive leave. 
  2. Pregnancy-related dismissals.
  3. Trade Union activity or membership. 

In the usual course, the Act will not apply to employees on probation. However, it can come into effect if the contract of employment is not in writing or if the probation lasts for less than a year (this should be specified in the contract).

Employees are usually on probation for 3 to 12 months in Ireland. After assessing the employee’s performance, the employer will decide whether or not to retain the person in full-time employment. 

Termination of employment in Ireland

According to the laws of Ireland, an employer must have cause to terminate an employee. Moreover, The Redundancy Payments Act of 1967 to 2014 says that employees with more than two years of service must be paid redundancy payments. They have the right to get two weeks of pay for each year of their service along with an additional one weeks’ pay.

Notice of termination of an employee

Employees are entitled to be served a notice of their termination. The notice period depends on their years of service. Here are details of the required notice period:

Duration of Employment Notice Period
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

If the duration of employment is more than the duration of employment specified in the legislation, the notice period must be given according to the terms of employment. Employers can terminate employees without providing notice only in cases of gross misconduct, provided the conduct is so severe that it requires immediate termination. 

The notice period during probation in Ireland is one week. Employers can dismiss employees on probation so long as the probation criteria are met.

EOR Solution

An Employer of Record (Ireland EOR) solution makes it easier and smoother for companies to expand into the country. There are a range of employment responsibilities that companies have to take on when expanding. These responsibilities can easily be taken care of by an EOR like Skuad. Not only that, with the help of Skuad's services, they can expand without establishing an entity in the country. Skuad can help you with payroll management, payroll taxes, work permits, and other responsibilities in Ireland. Click here to know more.

Types of Visas in Ireland

Visa Category Explanation Duration
Short Stay Visa This visa allows people to visit Ireland to study or for sightseeing for up to 90 days. However, this visa does not allow a person to work or to use public services. 90 days
Short Stay Business Visa The short-stay tourist visa does not allow a person to do business or work in Ireland. With a short stay business visa, a person can come for business or work and stay in Ireland for up to 90 days. 90 days
Employment Visa (Ireland Work Visa)

There is only one type of work visa in Ireland. People need to get permission from immigration before applying for this visa. After getting permission, one can apply for a long stay employment visa to work in Ireland. It must be noted that one needs an employment letter before applying for immigration permission.

Ireland work visa requirements: One needs to have a job offer in place. Permission is only given if the person is highly skilled or if Ireland has a skill shortage.

Depends on the type of employment and application.
Single or Multi-Entry Visa

A single entry visa only allows a person to visit Ireland for one time between the dates of validity of their visa.

A multi-entry visa, on the other hand, allows a person to have multiple short trips in Ireland while their visa is valid.

Depends on the validity of the underlying visa

Work Permits

Ireland’s work permit for foreigners is an essential requirement for non-residents. Usually, permission is only given to workers that are highly skilled and qualified over unskilled ones. It is not easy to get work permits in Ireland. 

Ireland work permit without job offer

In Ireland, a work permit cannot be obtained without a job offer in hand. Permission from immigration is only granted if your application has been accepted by an employer beforehand. 

Payroll & Taxes in Ireland

Employers need to know the local rules and regulations to set up a payroll system. Compliance is a major hurdle that costs companies time and money. They can outsource tasks such as payroll management and payroll taxation. Working with an EOR company like Skuad for payroll outsourcing in Ireland will help you gain an advantage as, by handing over matters of compliance and accounting matters, you get to focus on the growth of your business.

Tax Explanation
Corporate Tax The corporate tax rate in Ireland is just 12.5%, one of the lowest in the world.
Income Tax Rate
Taxable Income Rate Category
0-€35,300 20% Individuals that do not have dependent children
0-€39,300 20% Single or widowed individuals that get one-parent tax credits
0-€44,300 20% Married couples
On amount above the specified upper bracket 40% Across categories
Financial Year 1st January - 31st December
Universal Social Charge (USC) A Universal Social Charge (USC) is charged on an employee’s gross income before taxes, employees’ contribution to a pension fund, etc. The rates to be charged in 2021 are as follows:
Income Rate
First €12,012 0.5%
Next €8,675 2%
Next €49,357 4.5%
Balance 8%
Employees Contribution to National Social Infrastructure Fund (Unemployment Insurance - Ireland)

Employers, as well as employees, need to contribute to the National Social Insurance Fund. The fund is set up to provide security in case of future unemployment.

The employees pay their contributions according to their class category. Here are the different classes of employees and the contributions they need to make:

Employee PRSI - Class A

Employees who make less than €352 per week do not need to pay anything. They are still covered by Class A insurance.

Employees who make more than €352 per week need to pay 4$ on their earnings. Employees who make between €352.01-€424 per week can get a credit of up to €12. They have to pay €14 if they earn €352.01 per week. Subtracting the tax credit, they effectively need to pay €2.

Employers’ Contribution to National Social Insurance Fund

Employers must pay 8.8% employer PRSI Class A on earnings of up to €398 per week.

Employers must pay 11.05% employer PRSI Class A on earnings of more than €398 per week.

Payroll Tax - Ireland Employers must deduct income tax, PRSI contributions, etc.
Sales Tax (amongst the most significant employer taxes in Ireland) The Value Added Tax (VAT) stands at 23% of the net value and 18.70% of the gross value of goods.
Public Pension

There are two systems in place for this. First is the contributory state pension system, which is a pay-as-you-go system. Only those employees who have made 520 full contributions are eligible to benefit from this. The benefits are paid after the age of 56.

In addition, there is a non-contributory state pension system for those who can’t get the benefit of the first one.

Medical Insurance Ireland relies on the private insurance sector for medical insurance for employees. Employees need to select their options and pay for the insurance themselves. Employers can decide to contribute and can get tax credits on such expenditure.

Tax for foreigners working in Ireland is applicable as per the labor laws in Ireland. The tax will be applicable on the Irish income alone and not worldwide income.

Incorporation

Ireland has some of the biggest foreign companies in the world. Business is booming in Ireland, and mainly due to the low corporate tax rate, there is a considerable increase in foreign multinational companies in Ireland. Foreign investors can own 100% of the subsidiary in Ireland, making it a fantastic place to set up a subsidiary. Moreover, the subsidiary’s liability, in this case, will be limited to the share capital. 

Subsidiaries are to be registered with the Companies Registration office. These are the steps that companies need to take to form a subsidiary in Ireland:

1. Articles of Association (AOA)

The Articles of Association (AoA) is a crucial document for every company. It contains the name of the company, the office address, names and addresses of directors, purpose of the company, shareholding pattern, and other important information. 

2. Registration 

Companies need to register with the Companies Registration Office. After being satisfied with the submitted documents, the office will approve the same and issue a letter of incorporation. 

3. Registration with tax authorities

Companies need to register themselves with the relevant local tax authorities and must apply for a VAT number. 

4. Corporate bank account

Companies need to start a corporate account which will be used to conduct all transactions associated with the subsidiary. The minimum share capital needed for the subsidiary should be deposited in this account. 

These are the key steps in the process. Forming a subsidiary in another country while keeping in mind several laws and regulations can be a tedious task. Companies can take the help of EOR services like Skuad to take care of all the paperwork so that you do not have to worry about compliance and other issues.

Professional Employer Organization

A Professional Employer Organization (PEO) provides businesses with services such as consultancy, payroll, filing payroll taxes, handling health benefits and employers’ liability. However, its services are not just limited to those functions. It exists to handle all those issues that burden businesses and hinder their growth. 

A PEO is different from an EOR. EORs put employees on their payroll whereas with PEOs, the employees are on the company's payroll. Likewise, EORs hold employment agreements with themselves. With PEOs, companies hold employment agreements. Both have their own benefits and their own use case. For example, if you want to employ people for a short term, it’s best to go for an EOR. For a long term arrangement, a PEO is advisable. 

Companies can take the benefit of a PEO service such as those provided by Skuad to grow and expand their business in Ireland. Learn more here.

Conclusion: What Gives Skuad’s Ireland Solutions an Edge?

Skuad is a platform to build, pay, and manage teams worldwide. Global recruitment in Ireland is made possible by Skuad’s services. If you are looking to hire exceptional talent from Ireland, Skuad will handle everything from hiring to compliance. It provides an efficient and effective service that aims to provide companies with the option of hiring talents from across the world with ease. Sign up for a demo now.

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