Employment law in Ireland is broadly similar to its UK equivalent, which is good news for employers operating in both jurisdictions, and is particularly attractive to UK businesses looking for a European base as part of their Brexit strategy. There are, however, numerous differences which prospective employers should consider before setting up their Irish operation.
The National Minimum Wage in Ireland, as of 1 January 2019, is €9.80 per hour for an experienced adult employee. For workers under the age of 18, and those with less than two years work experience, their entitlement is based on a percentage of the National Minimum Wage – learn more about Irish National Minimum Wage rates here.
In the UK, from April 2019 the National Living Wage is £8.21 per hour for employees aged 25 and over. Under 25s must be paid either the Apprentice rate of £3.90 per hour, or the appropriate National Minimum Wage rate for their age bracket. Learn more about UK National Minimum Wage and National Living Wage rates here.
Ireland has nine public holidays each year (often referred to as ‘Bank Holidays’), while England & Wales have eight. Scotland has nine, although the dates can vary from region to region, while in Northern Ireland there are 10 officially recognised public holidays per year.
Under UK law, workers are entitled to 5.6 weeks of paid leave, which equals 28 days for someone who works a standard five-day week. Public holidays can be included in this calculation.
Under Irish legislation, employees have a basic annual leave entitlement of four weeks, which does not include public holidays.
In both countries, part-time workers are entitled to a pro-rata equivalent of the full-time rate.
Under Irish employment law, there is no statutory entitlement to be paid by your employer while on sick leave. Instead, Illness Benefit can be claimed from the Department of Employment Affairs and Social Protection.
UK employers are obliged to pay their eligible staff Statutory Sick Pay (SSP) for a period of up to 28 weeks.
Annual leave is still accrued during periods of sick leave in both Ireland and the UK.
In Ireland, the maternity leave entitlement is 26 weeks of paid leave, with the option of claiming a further 16 weeks of unpaid leave. This is quite different to the UK, where maternity leave is 52 weeks with 39 weeks paid. Fathers in both countries are entitled to two weeks paid paternity leave.
As with SSP, maternity and paternity pay in the UK is paid by the employer, while Irish employees must claim the equivalent from the Department of Employment Affairs and Social Protection.
The UK introduced Real Time Information (RTI) for reporting payments and deductions made under the PAYE system in April 2014, with information being transmitted to Her Majesty’s Revenue and Customs (HMRC) each time an employee is paid.
Under the PAYE modernisation programme, the Irish Revenue Commissioners (“Revenue”) launched a similar system in January 2019. Irish workers can now view an up to the minute record of their year-to-date pay and tax information via an online Revenue account.
Company cars are taxed differently in the two countries, with tax in the UK calculated on ‘the value to you of the company car’. Once calculated, the employer must report this to HMRC using an online form P11D.
In Ireland employees pay Benefit in Kind (BIK) through payroll on a percentage of the Original Market Value (OMV) of their company car, with the percentage dependent on the number of business miles travelled.
Medical Insurance purchased by an employer is taxable through payroll as a BIK in Ireland, while this is also reported via the P11D system in the UK.
The amount of tax relief available to an employee in the UK is adjusted to capture the tax due on the benefits reported in the P11D for the previous tax year.
Employers in the UK have to provide a workplace pension scheme and automatically enrol their staff into it. Employees do have the right to opt out, although they must be re-enrolled every three years. Currently in Ireland there is no obligation on employers to provide an occupational pension scheme, although they are obliged to offer staff access to a type of pension known as a PRSA. There are plans to introduce auto enrolment in Ireland along similar lines to the UK, with a proposed launch date of 2022.
UK employers with over 250 employees are obliged to submit an annual report to the government showing the difference between the average hourly wage of all men and women in their organisation. This information is uploaded to the government via an online portal and must be published on the company’s website. The Irish government is planning to introduce similar legislation and has suggested that it will ultimately apply to all employers with over 50 staff. No implementation date has yet been set in Ireland for this. Learn more about gender pay gap reporting in Ireland here.
When setting up an Irish company it is sometimes necessary for an employer to redeploy experienced staff from other countries to Ireland, which can be costly. To assist with this there are tax reliefs available for the employer and employee.
Relocation tax relief allows employers to cover the costs associated with the removal and relocation of inbound employees without incurring a tax liability, while Special Assignee Relief Programme (SARP) is a relief aimed at reducing the amount of PAYE payable by higher earners.
At EisnerAmper Ireland, our dedicated team of outsourced payroll professionals possess the knowledge and experience required to provide guidance and advice to employers setting up in Ireland for the first time. We also provide ongoing support and payroll processing services to organisations at every stage of their development.
Learn more about our outsourced payroll services here.
Payroll Lead Payroll