HR for Irish startups: the essentials
Reviewed by Mellow Editorial Team, HR & payroll content team
Running HR in an Irish startup means getting a handful of legal obligations right from day one — payroll compliance, contracts, leave entitlements and Revenue reporting — before you worry about culture decks or employee handbooks.
Get your employment contracts in order
Every employee must receive a written statement of core terms within five days of starting work. The full written contract must follow within one month. This is a legal requirement under the Employment (Miscellaneous Provisions) Act 2018, not a formality.
The core terms that must be in writing from day five include: the names of employer and employee, the address of the employer, the nature of the work, the start date, and the expected duration of a fixed-term contract if applicable. Get this wrong and employees can seek compensation at the Workplace Relations Commission (WRC).
For a startup, a well-drafted contract also protects you. Clauses covering intellectual property assignment, confidentiality and notice periods are worth including from the outset — retrofitting them later is awkward and sometimes unenforceable.
Set up payroll before the first payday
Ireland operates a real-time PAYE system. You must submit payroll information to Revenue via ROS on or before each payday. There is no monthly batch option — if you pay weekly, you report weekly. Late or missing submissions attract penalties.
The main deductions you will be calculating and remitting are:
- Income tax at 20% on earnings up to roughly €44,000 for a single person, and 40% on the balance. Ireland uses tax credits rather than a personal allowance, so the exact net pay depends on which credits each employee holds.
- USC (Universal Social Charge) in bands: 0.5%, 2%, 3% and 8% depending on income level.
- PRSI Class A: employees pay around 4.1% and you, as the employer, pay around 11.15% on top of gross pay.
That employer PRSI contribution is a significant cost that catches many founders off guard when budgeting for a first hire. A €50,000 salary costs you meaningfully more than €50,000 once employer PRSI is factored in.
You will also need to register as an employer with Revenue before you run your first payroll. Employees should register their job with Revenue too, so the correct tax credits are allocated — otherwise they may be taxed on an emergency basis, which is higher and creates payroll corrections to fix later.
Understand statutory leave entitlements
Statutory annual leave in Ireland is four working weeks per year for a full-time employee. Part-time employees accrue leave based on hours worked.
Beyond annual leave, there are several other entitlements you need to account for:
- Public holidays: there are ten public holidays. Employees are entitled to a paid day off, an additional day's pay, or a paid day off within a month — whichever you agree.
- Sick leave: statutory sick pay now applies from day one of employment, with entitlement increasing over the coming years. Employees must provide a medical certificate for statutory sick pay to apply.
- Parental and parent's leave: separate from maternity and paternity leave, these give parents additional weeks of state-benefit-backed leave in the early years of a child's life.
- Maternity leave: 26 weeks ordinary maternity leave plus up to 16 weeks additional unpaid leave.
A common startup mistake is treating statutory leave as the ceiling. Some employees will have negotiated enhanced terms; make sure those terms are written into the contract and tracked separately.
Pension auto-enrolment is coming
Ireland's pension auto-enrolment scheme, My Future Fund, is being introduced from 2026. Under this scheme, eligible employees will be automatically enrolled into a pension, with contributions from the employee, the employer and the state.
As a startup, you need to build employer pension contributions into your financial planning now if you have not already. The scheme will apply to employees who are not already in an occupational pension scheme and who meet the eligibility criteria. Employees can opt out, but you cannot avoid the administrative obligation of enrolment and contribution matching.
If you already offer a company pension scheme, check whether it meets the requirements that will allow employees to remain in it rather than defaulting to the state scheme.
Know where disputes go
Employment disputes in Ireland are heard by the Workplace Relations Commission at first instance, with appeals to the Labour Court. The WRC handles claims under most employment legislation — unfair dismissal, discrimination, unpaid wages, breach of contract and more.
The single biggest risk for an early-stage startup is not having documentation. If an employee raises a complaint and you cannot produce a contract, payslips, leave records or disciplinary correspondence, you are in a weak position regardless of the underlying facts. Keep records from day one and store them securely for at least the statutory retention periods.
---
Run HR and payroll in Ireland with Mellow
Mellow brings HR, payroll and 12 AI agents into one platform — built to handle Ireland properly, with payroll included, from £4 per employee per month. The AI agents don't just answer questions; they generate contracts, run cost estimates and draft letters for you.
[Start a free trial →](/register)