How to hire employees in Ireland

Hiring an employee in Ireland means either setting up an Irish entity and registering as an employer with Revenue to run PAYE, or engaging an employer of record (EOR) that employs the person for you. The first is the right foundation once you plan to build an Irish team; the second gets a first hire working without a local company. Capstan does not offer EOR services, so if that is the route you need, engage a provider directly.

Ireland is a common first European hire for companies coming from the US or UK: English-speaking, EU-based, and with a modern real-time payroll system. It is also introducing pension auto-enrolment, which changes the employer cost picture. This guide is a conceptual map, not a rate card. Rates, bands and rules change, so confirm current figures with Irish counsel or an Irish payroll provider before you rely on them.

Entity or employer of record

If you set up an Irish entity and register as an employer with Revenue, you operate PAYE yourself and carry the employment directly. That is worth doing once you intend to hire more than one or two people or stay for the long term.

If you are not ready for that, an EOR employs the person under its own Irish entity, runs their payroll and statutory obligations, and invoices you. You direct the work; they hold the employment relationship. It costs more per head and gives you less control, and it is a reasonable bridge for a first hire. In both cases the person is an employee with employment rights, not a contractor.

PAYE, PRSI, USC and real-time reporting

Every Irish payroll run withholds tax and contributions and reports them to Revenue on or before each payday under the real-time reporting system. You do not need to run the maths, but you should recognise the pieces, because they shape what your payroll provider needs each cycle.

PAYE income tax. Income tax is withheld from each pay based on the employee’s tax credits and standard rate band, and remitted to Revenue.

PRSI. Pay Related Social Insurance is paid by both employer and employee, with the employer share a real cost on top of gross salary.

USC. The Universal Social Charge is withheld from most income at rates that step up across bands.

Pension auto-enrolment. Ireland has legislated an automatic-enrolment retirement savings scheme, phasing in employer and employee contributions for eligible workers. Because its rollout and rates have moved, treat this as something to confirm rather than assume.

The pattern is a single national framework with figures that shift year to year. That is why the calculation belongs with a provider who tracks it, and why this guide gives you none of the numbers.

Contracts, notice and dismissal

Irish law requires employees to be given a written statement of core terms early in employment and fuller particulars soon after, and a proper contract setting out role, pay, hours and notice is standard. Statutory minimum notice grows with length of service, and contracts often set longer periods on top. Unfair dismissal protection generally applies once the employee has the qualifying service, so termination needs fair grounds and fair procedure once that threshold is met. Redundancy carries its own statutory entitlement. Treat the specifics as something to confirm with Irish counsel before you rely on them.

Data protection: GDPR

Employee data in Ireland falls under the GDPR and the Data Protection Act 2018, overseen by an active data protection commission. You need a lawful basis for processing employee data, clear retention, and appropriate security, and employees can ask what you hold about them. Keep employee data in one controlled place with proper access limits rather than scattered across drives and inboxes. Our note on handling employee data under the GDPR covers the security and access practices worth insisting on.

The contractor line

Ireland takes the contractor-versus-employee distinction seriously, and both Revenue and the Workplace Relations Commission look at the real substance of the relationship rather than the label on the agreement. Recent case law has reinforced a multi-factor test weighing control, mutuality of obligation, and whether the person is genuinely in business on their own account. Getting it wrong can bring back taxes and expose you to employment entitlements. A genuine contractor runs their own business with real independence; someone integrated into your team, under your direction, on your schedule, looks like an employee whatever the invoice says. If you are unsure, read contractor versus employee and take Irish advice before you commit.

Where Capstan fits

Capstan does not run Irish payroll and is not an employer of record. It operates no PAYE scheme, holds no tax credits or bands, and files nothing with Revenue. What it does is be the system of inputs around the calculation: employee records, pay structures, joiners and leavers, leave, attendance, and adjustments, compiled into a documented export for your Irish payroll provider. Their computed results come back onto the employee record, so your record and their filings agree. Contractors live in the same workspace as your team, and the contractor module adds their portal, invoices and payout register on top; like every module it needs a paid plan under it. Because Capstan runs from one self-contained EU region, with data resident in Frankfurt (eu-central-1) and compute in Amsterdam (eu-west-1), an Irish workspace sits inside the same European deployment as the rest of your team.

Public holidays. There is no bundled Irish holiday set, so you create the calendar, set its working week, add the dates, and assign it to the locations it covers. Bundled sets exist today for a short list of countries and Ireland is not on it, which is worth knowing before you plan a first-day setup rather than after. The calendar itself works the same way everywhere: holidays typed as public or restricted, a cap on how many restricted days an employee may pick, and an employment inheriting its calendar through its location.

Jurisdiction rules are data, not code. Nothing in Capstan hardcodes a country. Contractor tax content is a country pack your workspace configures per jurisdiction. You fill in each country’s contractor withholding, tax lines and document requirements yourself: a draft pack appears the moment you add a contractor in that jurisdiction, and you activate it once the values are ready. It covers contractor invoicing, not employee payroll. For Ireland, the tax treatment comes from you and your provider.

Where to go next

If your Irish hire is one part of a cross-border team, the guide to hiring global contractors covers the wider structures, and the UK country note follows the same shape and is the closest neighbour to compare against. If you are weighing an EOR against your own entity, employer of record explained sets out the trade. For the current PAYE, PRSI, USC and auto-enrolment figures this guide has left out on purpose, speak to an Irish payroll provider or employment solicitor. The structure is the durable part; the numbers you confirm each year.