HR for founders in Ireland
Reviewed by Mellow Editorial Team, HR & payroll content team
Running HR properly as a founder in Ireland means understanding your legal obligations as an employer — contracts, payroll, leave, and compliance — before you hire, not after.
Know your obligations before your first hire
The moment someone starts working for you as an employee, Irish employment law applies in full. That includes providing a written statement of core employment terms within five days of their start date, and a full contract within one month. This is a legal requirement under the Employment (Miscellaneous Provisions) Act 2018, not just good practice.
Before you pay anyone, you need to register as an employer with Revenue. You do this through ROS (Revenue Online Service). Once registered, every payroll payment requires a real-time submission to Revenue on or before each payday. There is no catch-up filing at year end — the submission happens with each pay run.
Payroll: what actually comes out of a salary
Irish payroll involves three separate deductions, each with its own logic.
Income tax runs at 20% on earnings up to around €44,000 for a single person, and 40% above that. Ireland does not use a personal allowance like the UK. Instead, employees receive tax credits — the most common being the personal tax credit and the employee (PAYE) tax credit — which reduce the actual tax owed rather than adjusting the taxable base.
USC (Universal Social Charge) is charged in bands: 0.5%, 2%, 3%, and 8%, depending on the level of income. It applies to gross income above a low threshold and is separate from income tax entirely.
PRSI (Pay Related Social Insurance) for a standard employee on Class A is roughly 4.1% from the employee and 11.15% from the employer. The employer contribution is a significant additional cost on top of gross salary — worth building into any hiring budget from the start.
When you hire someone at €50,000, the true cost to the business is meaningfully higher than that figure once employer PRSI is included.
Statutory leave entitlements
Every employee in Ireland is entitled to four working weeks of paid annual leave per year (under the Organisation of Working Time Act 1997). This is the statutory minimum — you can offer more, but not less.
Beyond annual leave, employees also accrue the right to paid sick leave under the Sick Leave Act 2022. The entitlement has been phasing in over several years. Statutory sick pay is paid by the employer, not the State, which is a point many founders miss.
Public holidays add further paid leave obligations. Ireland has ten public holidays. Employees are entitled to either the day off, an additional day's annual leave, an additional day's pay, or a paid day off within a month — depending on what is agreed or what the employment contract provides.
Maternity, paternity, adoptive, and parent's leave all carry statutory protections and in most cases involve both State benefit payments and employer obligations around job protection.
Getting contracts right
A poorly written contract creates risk. In Ireland, if a term is absent or ambiguous, courts and the Workplace Relations Commission tend to interpret disputes in the employee's favour.
Key things to include: job title and duties, place of work, hours, salary, leave entitlements, notice periods, and any probationary period. Probation can be a useful tool — it gives both sides a structured review period — but it does not remove most statutory employment rights. An employee on probation still has protections against discriminatory dismissal under equality legislation, for example.
Non-compete and confidentiality clauses are enforceable in Ireland, but non-competes in particular are scrutinised by courts. They must be reasonable in scope and duration to have any practical effect.
Pensions and what is coming
From 2026, Ireland is introducing mandatory pension auto-enrolment through a scheme called My Future Fund. This will require employers to enrol eligible employees automatically and make employer contributions. If you do not already have a workplace pension scheme in place, this is the year to understand what auto-enrolment will require of you and plan accordingly.
The obligations will be phased in, with contribution rates stepping up over time for both employers and employees. Getting ahead of it — even at a basic administrative level — is far easier than scrambling once the deadlines arrive.
The Workplace Relations Commission
Employment disputes in Ireland go to the Workplace Relations Commission (WRC) rather than the courts in the first instance. Complaints can be made by employees up to six months after the alleged breach (or 12 months in exceptional circumstances). The WRC can award compensation, reinstatement, or other remedies.
The most common complaints involve unfair dismissal, non-payment of wages, and breaches of the Organisation of Working Time Act. Keeping clear records — payslips, contracts, correspondence, leave records — is your first line of defence if a complaint ever arises.
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