How to hire your first employee in Ireland
Reviewed by Mellow Editorial Team, HR & payroll content team
Hiring your first employee in Ireland means registering as an employer with Revenue, setting up a compliant payroll, and understanding your statutory obligations before the person's first payday — not after.
Register as an employer with Revenue
Before you pay anyone, you need to register as an employer. You do this through Revenue's Online Service (ROS). If you do not already have a ROS account, set one up first — it takes a few days to get your digital certificate, so do not leave this until the week before someone starts.
Once registered, Revenue will issue you an employer registration number. You will need this to file payroll submissions and to appear correctly on your employee's tax record.
Get the right paperwork in place before day one
There are two things you must have sorted before your employee starts work.
A written contract of employment. Under the Terms of Employment (Information) Acts, you must give a new employee a written statement of their core terms within five days of starting, and the full contract within one month. The core terms include job title, pay, hours, and place of work. Get this right from the start — disputes about employment terms are far easier to avoid than to resolve.
Tax and PRSI registration for the employee. Ask your new hire for their PPSN (Personal Public Service Number). Revenue will then make a Revenue Payroll Notification (RPN) available to you on ROS. The RPN tells you what tax credits and cut-off points apply to that person. Without an RPN, you must operate emergency tax — which means higher deductions for the employee and a poor first impression for you.
Understand what you will deduct and what you will pay
Irish payroll involves three main deductions from gross pay, plus employer contributions on top.
Income tax is charged at 20% on earnings up to roughly €44,000 for a single person, and 40% on earnings above that. Ireland uses a system of tax credits rather than a personal allowance, so the RPN will tell you exactly what credits to apply. Do not guess at this — use the RPN.
USC (Universal Social Charge) is banded: 0.5% on the first slice of income, 2% on the next, 3% on a further band, and 8% on higher earnings. There are exemptions and reduced rates for certain categories, which Revenue will account for in the RPN.
PRSI (Pay Related Social Insurance) for a standard employee on Class A is approximately 4.1% from the employee's pay. You also pay an employer PRSI contribution of approximately 11.15% on top of gross pay. This is a significant on-cost that many first-time employers underestimate — factor it into your hiring budget before you make an offer.
If you are running your own calculations to check affordability, the true cost of an employee is gross salary plus roughly 11.15% employer PRSI, plus any employer pension contributions.
File payroll in real time
Ireland operates a real-time payroll reporting system. You must submit a Payroll Submission Report (PSR) to Revenue on or before each payday — not monthly in arrears, not at year end. Every single pay run.
This submission goes through ROS and records each employee's gross pay, tax, USC, and PRSI. Revenue uses this data to maintain each individual's tax record throughout the year and to reconcile your liability.
If you are handling payroll manually in a spreadsheet, real-time filing is manageable for one or two employees, but errors are easy to make and time-consuming to fix. Most employers use payroll software or a payroll service from the outset. If you want to understand how that works in practice, how Mellow runs payroll across six countries on one platform gives a useful comparison.
Know your statutory obligations beyond pay
Pay is not the only obligation. A few others that catch first-time employers out:
Annual leave. Employees are entitled to 4 working weeks of paid annual leave per year (pro-rated for part-time or part-year workers). This accrues from day one.
Public holidays. Ireland has 10 public holidays. Employees are entitled to a benefit for each — either the day off with pay, an additional day's pay, or a day off in lieu, depending on their work pattern.
Pension auto-enrolment. The Government's auto-enrolment scheme, My Future Fund, is being introduced from 2026. If you are hiring now, you need to be aware that employer pension contribution obligations are coming and will apply to most employees. Build this into your cost planning.
Employer's liability insurance. Not a Revenue matter, but legally required. Sort this before your employee's first day.
Getting these fundamentals right from the start protects both you and the person you are bringing on board.
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