HR for a business with 1–10 employees in Ireland
Reviewed by Mellow Editorial Team, HR & payroll content team
Running HR properly for a small business in Ireland does not require a dedicated HR team — but it does require you to know the rules, apply them consistently, and keep records that would hold up under scrutiny.
The legal baseline you must meet from day one
Every employee, regardless of hours or contract type, is entitled to a written statement of core terms within five days of starting, and a full written contract within one month. The Terms of Employment (Information) Acts cover this. At minimum, the statement must include the job title, start date, pay rate, and hours.
From there, the statutory floor includes:
- Annual leave: 4 working weeks per leave year (or pro-rata for part-time staff)
- Public holidays: entitlement to time off or pay, depending on how the day falls
- Minimum wage: check the current National Minimum Wage rate on gov.ie — it is updated periodically
- Rest periods: 11 consecutive hours between working days, and a 15-minute break after 4.5 hours worked
Keep a record of working hours. The Organisation of Working Time Act 1997 puts the obligation on you as employer to demonstrate compliance, not on the employee to prove a breach.
Setting up payroll correctly
In a business with 1–10 employees, payroll is often the first thing that goes wrong. Ireland uses a real-time PAYE system: you must submit payroll data to Revenue through ROS on or before each payday. There is no filing after the fact.
Each payslip deducts:
- Income tax at 20% on earnings up to roughly €44,000 for a single person, and 40% above that. Ireland uses tax credits rather than a personal allowance — employees claim their credits through their tax record, which affects how much you actually withhold.
- USC (Universal Social Charge) in bands: 0.5%, 2%, 3%, and 8% depending on income level
- Employee PRSI at approximately 4.1% for Class A workers
As employer, you also pay employer PRSI of approximately 11.15% on top of gross wages. This is a real cost that needs to be in your budget from the start — it is not deducted from the employee's pay.
From 2026, pension auto-enrolment is being introduced under the "My Future Fund" scheme. Employees who meet the eligibility criteria will be automatically enrolled, with contributions required from both employee and employer. If you do not already have a pension arrangement in place, this will affect your payroll setup and cost base.
Contracts and policies that actually protect you
A one-page contract is better than none, but it will not protect you from most disputes. At minimum, your written contract should cover: notice periods (both ways), probationary period and how it works, pay and any bonus terms, confidentiality, and who owns work created during employment.
For a team of up to ten people you do not need a 50-page staff handbook, but you do need a small number of clear written policies:
- Grievance and disciplinary procedure: required under the Code of Practice on Grievance and Disciplinary Procedures. Without one, a dismissal is almost impossible to defend at the Workplace Relations Commission (WRC).
- Leave policy: annual leave, sick leave (including your obligations under the Sick Leave Act 2022), maternity and parental leave entitlements
- Dignity at work / anti-harassment policy: legally required under employment equality legislation
Keep these documents somewhere employees can actually find them. Emailing a PDF once and never mentioning it again is not sufficient.
Managing performance and exits without legal exposure
Most WRC cases involving small employers come down to one of two things: no written procedure was followed, or there is no paper trail showing it was.
If an employee is not performing, document your concerns early and have a direct conversation. Use your probationary period properly — it exists specifically to allow you to part ways more easily if the fit is not right, but you still need to follow a fair process even within probation.
For a formal disciplinary process, the standard in Ireland is: written notice of the concern, a meeting where the employee can respond, the right to be accompanied by a colleague or trade union representative, a written outcome, and a right of appeal. Skipping steps is where employers lose cases they should have won.
Redundancy is a separate process with its own rules around selection criteria, notice, and statutory redundancy pay (for employees with two or more years' service). If you are considering redundancy, take legal advice before you act.
Keeping records without bureaucracy
Small employers often under-invest in record-keeping until it becomes a problem. You are legally required to retain payroll records for six years. Employment records more broadly should be kept for the duration of employment plus a reasonable period after — at minimum until any potential claim window has passed.
You do not need sophisticated software. A consistent folder structure, a payroll system that integrates with ROS, and a habit of writing brief notes after any significant conversation with an employee will cover most situations.
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