A glossary of Irish payroll terms
Reviewed by Mellow Editorial Team, HR & payroll content team
Understanding Irish payroll means getting comfortable with a specific set of terms that do not always map neatly onto payroll systems from other countries. This glossary covers the core terminology you will encounter when running payroll in Ireland, whether you are doing it yourself or overseeing a provider.
Tax and deduction fundamentals
PAYE (Pay As You Earn) — the system through which income tax is deducted from an employee's pay before they receive it. Employers collect and remit this on behalf of Revenue.
Income tax — charged at two rates. The standard rate is 20%, which applies up to roughly €44,000 of taxable income for a single person. Above that, the higher rate of 40% applies. Unlike the UK, Ireland does not use a personal allowance. Instead, Ireland uses tax credits.
Tax credits — a fixed euro amount that reduces an employee's actual tax bill, not their taxable income. Every employee gets a personal tax credit and an employee tax credit. Revenue issues each employee a Revenue Payroll Notification (see below) that tells you how much to apply.
USC (Universal Social Charge) — a separate charge on gross income, applied in bands: 0.5%, 2%, 3%, and 8%. It is not income tax and sits alongside PRSI as its own deduction.
PRSI (Pay Related Social Insurance) — a social insurance contribution split between employer and employee. For most employees on Class A, the employee pays around 4.1% and the employer pays around 11.15%. PRSI funds entitlements such as Jobseeker's Benefit and the State Pension.
Gross pay — total earnings before any deductions. This is the figure most statutory calculations start from.
Net pay — what the employee actually receives after income tax, USC, and PRSI are deducted. Sometimes called take-home pay.
Notional pay — a non-cash benefit given to an employee (such as a company car or medical insurance) that is still treated as taxable income for PAYE, USC, and PRSI purposes.
Revenue systems and employer obligations
ROS (Revenue Online Service) — Revenue's online portal where employers register, file payroll submissions, and make payments.
Real-time reporting (RTR) — since 2019, Ireland has required employers to submit a payroll file to Revenue on or before each payday. There is no end-of-year P35 any more; compliance is built into every pay run.
Revenue Payroll Notification (RPN) — formerly called the P2C or tax certificate. This is the electronic file Revenue sends to employers telling them an employee's tax credits, cut-off point, and any other instructions (such as a reduced rate). You must fetch an up-to-date RPN before processing each payroll run.
Emergency tax — applied when you do not have a valid RPN for an employee. Emergency tax rates are unfavourable for the employee, so it is worth fetching RPNs promptly.
PSR number (Personal Public Service Number) — the employee's unique identifier in the tax system, equivalent to a national insurance number in the UK. You need it to register an employment and pull down the correct RPN.
Employer Registration Number — your business's identifier with Revenue for payroll purposes. You must register as an employer before you make your first payroll submission.
Pay periods and leave
Pay period — the frequency at which employees are paid: weekly, fortnightly, or monthly are the most common in Ireland. Your payroll submissions to Revenue must align with this frequency.
Cut-off point — the amount of income taxable at the standard rate (20%) in a given pay period. It is derived from the employee's annual standard rate band and split proportionally across pay periods.
Annual leave — employees are entitled to 4 working weeks of paid leave per leave year under the Organisation of Working Time Act. Holiday pay must reflect the employee's normal weekly rate of pay.
Public holidays — Ireland has 10 public holidays per year. Entitlement and how they are paid depends on whether the employee normally works on that day.
Pensions and newer obligations
Occupational pension scheme — an employer-sponsored pension arrangement. Contributions by the employer are typically not subject to PRSI, which is a consideration when structuring total compensation.
My Future Fund (auto-enrolment) — Ireland's mandatory pension auto-enrolment scheme, being introduced from 2026. It will require employers to enrol eligible employees automatically and make matching contributions. If you do not already have a pension scheme in place, this will apply to you.
BIK (Benefit in Kind) — taxable non-cash benefits provided to employees. Common examples include company cars, preferential loans, and employer-paid medical insurance. BIK is added to an employee's notional pay for tax and PRSI calculation purposes.
Payslip requirements
Employers in Ireland are legally required to provide employees with a written statement of pay — a payslip — on or before each payday. It must show gross pay, each deduction and its amount, and net pay. Keeping payroll records is also a statutory obligation; Revenue can inspect them and records should be retained for several years.
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