The employee lifecycle in Ireland, end to end
Reviewed by Mellow Editorial Team, HR & payroll content team
Every employment relationship in Ireland follows a predictable arc — from the moment you decide to hire through to the day the employee leaves. Understanding each stage helps you stay compliant, avoid costly mistakes, and treat people fairly throughout.
Hiring and onboarding
Before anyone starts work, you need a written contract in place. Under the Terms of Employment (Information) Acts, you must give employees a written statement of their core terms within five days of starting, and a fuller written statement of all terms within one month. The core five-day statement must cover job title, start date, pay, hours, and place of work.
You also need to register the employee with Revenue. Every employee must have a Personal Public Service (PPS) number, and you register them on Revenue Online Service (ROS). Revenue then issues a Revenue Payroll Notification (RPN) — the document that tells you which tax credits and cut-off points apply to that individual. Without an RPN, you must apply emergency tax, which deducts at the higher rate with no credits. Get the RPN before the first payday if at all possible.
Onboarding paperwork also includes checking the employee's right to work in Ireland. For non-EEA nationals, that means verifying a valid employment permit before work begins.
Running payroll
Once someone is on your books, payroll is an ongoing statutory obligation. Ireland operates a real-time reporting system: you must submit a payroll submission to Revenue via ROS on or before each payday. There is no monthly catch-up — each pay run is reported as it happens.
Every payslip must correctly deduct:
- Income tax at 20% up to the employee's standard rate cut-off point (roughly €44,000 for a single person in 2026), and 40% on earnings above that. Ireland does not use a personal allowance system — tax credits reduce the actual liability after the rate is applied.
- Universal Social Charge (USC) on a banded basis: 0.5%, 2%, 3%, and 8% depending on earnings bands.
- PRSI at approximately 4.1% for the employee under Class A. You as the employer pay approximately 11.15% on top of that.
You also handle any statutory sick pay deductions, benefit-in-kind calculations for perks like company cars or health insurance, and any salary sacrifice arrangements.
From 2026, pension auto-enrolment under the My Future Fund scheme is being phased in. Both employers and employees will be required to make contributions, so it is worth reviewing your current pension arrangements now if you have not already.
Managing the employment relationship
Day-to-day compliance does not stop at payroll. Statutory entitlements accumulate throughout employment:
- Annual leave: employees are entitled to four working weeks of paid leave per year under the Organisation of Working Time Act.
- Public holidays: Ireland has ten public holidays, each carrying its own entitlement rules.
- Statutory sick pay: the Sick Leave Act introduced a legal minimum of paid sick days, with the number of qualifying days increasing incrementally in recent years.
- Parental and family leave: there are several distinct schemes — maternity leave, paternity leave, parent's leave, and parental leave — each with different qualifying periods and pay rules.
Keeping accurate records matters throughout. You are required to retain payroll and employment records for several years, and the Workplace Relations Commission (WRC) can inspect those records or adjudicate on disputes.
Handling a resignation or dismissal
When an employee leaves, either voluntarily or otherwise, there are clear legal steps to follow.
Redundancy triggers a statutory redundancy payment for employees with at least two years of continuous service, calculated using a statutory formula based on length of service and weekly pay (subject to a weekly earnings cap set by legislation).
Dismissal outside of redundancy must follow fair procedures. The WRC has clear guidance on natural justice: the employee must know the case against them and have an opportunity to respond. Unfair dismissal claims can be brought after one year of continuous service in most cases, and remedies include reinstatement or compensation.
Notice is governed by the Minimum Notice and Terms of Employment Act. The minimum period starts at one week for someone employed between four weeks and two years, rising incrementally with length of service. Your contract may provide longer notice periods, which take precedence if they are more generous.
The final payslip must include all outstanding pay, accrued but untaken annual leave, and any other contractual entitlements. You submit a final payroll submission to Revenue and update the employee's record on ROS. If a P45 equivalent is needed — Revenue now handles this through the myAccount system rather than a paper form — Revenue generates it automatically once the final submission is processed.
Record-keeping and ongoing compliance
The lifecycle does not end cleanly when someone walks out the door. Data protection obligations under GDPR require you to retain only what is necessary and for no longer than required, but employment and payroll records typically need to be kept for six years for Revenue compliance purposes. HR records related to potential legal claims should be held according to the relevant limitation periods.
Reviewing your contracts, policies, and payroll processes periodically — rather than only when something goes wrong — is the most practical way to stay on the right side of Irish employment law.
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