Irish Payroll & Tax Sorted Without the Stress

Revenue operates a sophisticated digital ecosystem through its Revenue Online Service (ROS). Every employer must register, file returns, and remit payments electronically. Non-compliance isn’t just penalised—it’s immediately visible to Revenue.

Employer Tax Registration

Before hiring your first employee, you must register as an employer with Revenue. This establishes your:

• Employer PAYE number (identifies you for payroll tax)
• ROS digital certificate (secure access to Revenue systems)
• PRSI employer registration (with Department of Social Protection)

Registration is done through ROS and typically takes 5-10 business days.

Revenue Online Service (ROS)

ROS is accessed through the Revenue website, and registration can be done online. You’ll need:

• Tax Registration Number
• Digital certificate (downloaded and password-protected)
• Bank account details for payments

ROS is mandatory for employers—there’s no paper option for payroll returns.

Monthly Filing Obligations

Real-time reporting:
Payroll submissions (RPNs) must be filed on or before every pay date. This isn’t a monthly return—it’s a submission for every single payroll run.

Each time you pay employees, you must:

1. Request Revenue Payroll Notifications (RPNs) for each employee
2. Calculate PAYE/USC/PRSI based on RPNs
3. Submit payroll details to Revenue
4. Pay employees their net amount
5. File return and make payment to Revenue

P30 Returns: Monthly Payment Summary

Form P30 is a monthly return of PAYE, USC, PRSI, and LPT to the Revenue Commissioners. A P30 must be submitted within 14 days of the month-end, and failure to do so will result in a fine.

For employers who file their returns and associated tax payments via ROS, time limits are extended to the 23rd of the month immediately following the income tax period.

P30 Deadlines:

• Paper filers: 14 days after month-end
• ROS filers: 23rd of following month

Example: January payroll taxes are due by February 23, 2025 (if filing via ROS).

P35 Annual Return

Each registered employer in Ireland is obliged by law to account each year for the PAYE, PRSI, USC, and LPT deducted from employees. A special return, commonly known as a P35, is used for this purpose.

The deadline for the P35 return is February 15 (or 46 days after cessation if the business ceases before December 31). This deadline is extended to February 23 for ROS customers who pay and file online.

The P35 reconciles your entire year’s payroll—think of it as your annual proof that you’ve properly handled all employee tax.

Payslip Requirements

By law, you must give employees a payslip when they are paid. Your payslip must show any deductions from pay, including PRSI contributions.

Payslips must detail:

• Gross pay
• PAYE deducted
• USC deducted
• PRSI deducted (employee and employer portions, though only employee deduction reduces take-home)
• Net pay
• Pay period

Record-Keeping Obligations

Employers must maintain:

• All payroll records for 6 years
• Employee tax details (PPS numbers, tax credits)
• Copies of all ROS submissions
• Bank payment records showing tax remittance

Revenue can audit any employer and will request these records. Missing or incomplete records can result in penalties even if the right tax was paid.

Penalties for Non-Compliance

Late filing surcharges:
If you are less than 2 months late in filing your tax return, your total tax bill will be increased by 5% as a late filing penalty. If you are more than 2 months late, your tax bill will be increased by 10%.

Interest on late payment:
The interest rate on overdue tax is currently 0.0219% per day (approximately 8% annually).

Automated enforcement:
Because Revenue’s systems are real-time, late or missing P30 returns trigger automatic penalties. There’s no grace period or reminder—the deadline is the deadline.

Not everything an employer provides is pure salary. Ireland has specific rules for how non-cash benefits are taxed.

What Is Benefit-in-Kind (BIK)?

A benefit-in-kind is any non-cash benefit that an employer provides to an employee as part of their job. These perks have a monetary value and are considered taxable income by Revenue. This means tax must be taken from the employee’s pay under the PAYE system, based on the value of the benefit.

BIK is added to the employee’s gross income and subject to PAYE, USC, and PRSI.

Common BIK Categories

Company cars:
From January 2023, new benefit-in-kind rules apply to company cars in Ireland, changing how tax is calculated on these vehicles. BIK is based on the car’s Original Market Value (OMV) and CO₂ emissions. Lower emissions = lower BIK. Electric vehicles receive favourable treatment, though the exemption is being phased out.

Health insurance:
Health insurance paid by the employer for employees is generally exempt from BIK, but if the insurance covers a spouse, civil partner, or dependents, it could be considered taxable.

Remote work equipment:
If your employer provides you with equipment for business use, it is not taxed as a benefit-in-kind. Laptops, monitors, and phones for work are exempt. Personal use equipment is BIK.

Accommodation:
Employer-provided housing is a significant BIK, generally calculated as 8% of the property’s market value annually.

Preferential loans:
Low-interest or interest-free loans create a BIK based on the difference between the Revenue-specified rate and the actual rate charged.

BIK Exemptions and Relief

Small Benefit Exemption:
From January 1, 2025, you can give employees up to 5 benefits each year, up to a total value of €1,500. If more benefits are given in a year, only the first 5 benefits qualify.

This is incredibly useful for employee recognition – vouchers, gift cards, small perks – without triggering tax consequences.

Travel passes:
The provision by an employer of monthly or annual bus, train, or Luas passes for commuting is tax-exempt. This is the TaxSaver scheme, encouraging public transport use.

Cycle-to-Work scheme:
Employees who purchase bicycles or e-bikes for commuting through this scheme can save on income tax and PRSI on the cost.

Employer pension contributions:
Not treated as BIK – employer contributions to occupational pension schemes are tax-free for employees (within limits).

How BIK Is Reported

Employers must:

• Calculate the value of any BIK provided
• Add this value to the employee’s gross pay in payroll
• Deduct PAYE, USC, and PRSI on the combined amount
• Report BIK separately on payslips
• Include BIK in P35 annual return

In most cases, a benefit is added to an employee’s pay and taxed accordingly. The employer will deduct income tax, USC, and PRSI on the value of the benefit.

Remote Worker Expense Considerations

With the rise of remote work, questions arise about what employers can provide without tax implications:

Tax-free:

• Equipment required for work (laptop, monitor, keyboard)
• Software licences for business use
• Office furniture (if employer-owned and returned on termination)

Potentially taxable:

• Upgraded personal equipment
• Home broadband (unless “Remote Working Relief” claimed by employee)
• Furniture given to employee permanently

The key test: is it required for business purposes and owned by the employer, or is it a personal benefit?

Remote Working Relief:
You may be able to claim tax relief on additional costs of working from home, including electricity, heating, and broadband. Your employer can pay you a contribution towards these costs, or you can make a claim for tax relief during or after the year.

This allows tax relief of up to 30% of reasonable expenses (currently €3.20/day for remote days).