HR and payroll for marketing agencies in Ireland
Reviewed by Mellow Editorial Team, HR & payroll content team
Running HR and payroll for a marketing agency in Ireland comes with a specific set of pressures: a mix of permanent staff, freelancers and contractors; project-based billing cycles that don't always match payroll dates; and a talent market where people move frequently. Here is what you need to know to manage it properly.
The employment status question matters more in agencies
Marketing agencies routinely work with a blend of employees, contractors and freelancers. Revenue and the Workplace Relations Commission (WRC) both scrutinise employment status carefully, and getting it wrong is costly.
The test is not what you call the arrangement — it is the reality of how the person works. If someone works set hours, uses your equipment, cannot send a substitute, and is integrated into your team, Revenue is likely to treat them as an employee regardless of what the contract says. That means you owe PAYE, PRSI and USC on their earnings, potentially backdated.
For genuine contractors operating through their own limited company, the arrangement is more straightforward. But if you are engaging sole traders or individuals directly on a project basis, run through Revenue's Code of Practice on Determining Employment or Non-Employment before you sign anything. A misclassification audit is far more disruptive than doing the admin correctly from the start.
What payroll actually involves for agency staff
Once someone is an employee, you are responsible for operating PAYE in real time. That means submitting a payroll submission to Revenue via ROS on or before each payday — not monthly in arrears, not at year-end. Every pay run.
The tax rates your employees pay are 20% on income up to roughly €44,000 (for a single person), and 40% on anything above that. Ireland uses tax credits rather than a personal allowance, so each employee's net pay depends on the credits Revenue has allocated to them via their Tax Credit Certificate. Make sure every new hire registers their employment with Revenue and that you receive the correct certificate before their first pay run. If you do not, you deduct tax on an emergency basis, which almost always results in the employee being overtaxed and frustrated before they have settled in.
On top of income tax, employees pay USC at banded rates — 0.5%, 2%, 3% and 8% depending on their income level — and PRSI at 4.1% (Class A). As the employer, you pay PRSI at 11.15% on top of gross salary. That employer PRSI cost is a significant line item that agencies sometimes underestimate when pricing a new hire into their cost base.
From 2026, pension auto-enrolment under the My Future Fund scheme is being introduced. Agencies will need to enrol eligible employees automatically, with both employer and employee contributions phased in over time. If you have not already reviewed your current pension arrangements and assessed which staff will be auto-enrolled, now is the time to do it.
Managing freelancers and the contractor payroll gap
Many agencies pay freelancers on invoice, which keeps them off payroll entirely — and that is fine where the relationship is genuinely commercial. But there is a practical gap worth acknowledging: freelancers have no statutory protections, no employer PRSI, and no holiday entitlement from you. That creates flexibility but also risk if the relationship deepens over time and starts to look more like employment.
If you bring contractors in for extended engagements — six months on a campaign, a year covering a maternity leave — revisit the employment status question at intervals. A relationship that started as genuinely independent can drift into something that looks like employment, and the liability drifts with it.
Annual leave and contracts for a mobile workforce
Marketing agency staff tend to move around. Short tenures are common. That makes clean contracts and accurate leave tracking more important, not less.
Statutory annual leave in Ireland is four working weeks. Employees accrue leave from day one, and you must pay out any accrued but untaken leave when someone leaves. Agencies that track leave loosely often find themselves calculating terminal leave payments under pressure and getting them wrong.
Your employment contracts should be clear about notice periods, confidentiality obligations, and — where relevant — any restrictions on working for clients or competitors after leaving. These clauses need to be reasonable and proportionate to be enforceable, but they are worth including, particularly for senior account or strategy hires who carry client relationships.
Scaling the team around project cycles
Agency headcount tends to fluctuate with client wins and losses. Fixed employment costs are difficult to scale down quickly, which is why many agencies deliberately keep their permanent headcount lean and use contractors for capacity.
If you do need to reduce headcount, redundancy entitlements apply from two years of continuous service, and the process — selection criteria, consultation, notice — must be followed correctly. Cutting corners on a redundancy process is one of the more reliable ways to end up at the WRC.
For agencies that work internationally — placing staff with overseas clients, or hiring talent from abroad — Irish employment law still applies to employees who are ordinarily based in Ireland, regardless of where the client is.
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