As a business owner in Ireland, whether you’re a sole trader, company director, or employer, it’s crucial to manage payroll accurately. With ongoing updates in tax regulations, Payroll Ireland 2025 brings important considerations around PAYE, PRSI, USC, and pension obligations. Getting payroll right not only ensures compliance but also builds trust with your employees and avoids costly penalties.
This guide will help you navigate key payroll components, understand employee deductions, and keep your business aligned with Revenue requirements in 2025.
💰 What Is PAYE in Payroll Ireland 2025?
PAYE (Pay As You Earn) is the income tax deducted from employees’ wages — including your own if you pay yourself a salary. Under Payroll Ireland 2025, PAYE remains one of the central components of payroll processing.
How PAYE Works:
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Standard Rate: 20% on income up to a defined threshold.
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Higher Rate: 40% on income above that threshold.
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Tax Credits: Deductions such as the Employee Tax Credit or Personal Tax Credit reduce the PAYE owed.
Why PAYE Matters:
PAYE ensures that employees contribute their fair share of income tax in real-time. As an employer or company director, you are responsible for deducting and remitting PAYE on time. Failure to comply under Payroll Ireland 2025 can result in penalties and interest charges from Revenue.
👥 PRSI – Pay Related Social Insurance in 2025
PRSI is another critical component of Payroll Ireland 2025, designed to fund Ireland’s social welfare system. It’s a joint contribution from employers and employees and enables access to essential benefits like maternity leave, illness benefits, and pensions.
2025 PRSI Rates:
Class A (most employees under 66)
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Until 30 September 2025:
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Employee: 4.10 %
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Employer:
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8.90 % on weekly earnings up to €352
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11.15 % on all earnings above €527 per week
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From 1 October 2025:
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Employee: 4.20 %
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Employer:
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9.00 % on earnings up to €527
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11.25 % on earnings above €527 per week
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Additional Notes:
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Employees earning €352 or less per week pay no PRSI.
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A PRSI credit of up to €12 per week applies for earnings between €352.01 and €424, tapering as earnings increase.
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Class S (self-employed & certain company directors)
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Until 30 September 2025:
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Self‑employed contributors pay: 4.10 %
There is a minimum annual contribution of €650 if annual income exceeds €5,000.
From 1 October 2025:
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Rate increases to: 4.20 %
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Class M (non-contributors—with limited or no entitlements)
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Applies to those with no PRSI liability, such as:
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People under 16
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Individuals over pension age or receiving a Contributory State Pension
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Occupational pensioners (for that portion of income)
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Public office holders with weekly earnings of €100 or less
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Contribution Rate: 0 %
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Entitlement: Very limited or none
Class K (certain public office holders and unearned income)
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Until 30 September 2025:
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Rate: 4.10 % on income above €5,200 per year (i.e., over €100 per week)
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From 1 October 2025:
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Rate increases to: 4.20 %
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Note: For those earning €100 per week or less, Class M applies—a zero-contribution class.
Summary Table
| PRSI Class | Period | Employee Contribution | Employer Contribution |
|---|---|---|---|
| Class A | Up to 30 Sep 2025 | 4.10 % (earning > €352) | 8.90 % (≤ €352); 11.15 % (> €527) |
| From 1 Oct 2025 | 4.20 % | 9.00 % (≤ €527); 11.25 % (> €527) | |
| Class S | Up to 30 Sep 2025 | 4.10 % (min €650 if > €5,000 income) | N/A |
| From 1 Oct 2025 | 4.20 % | N/A | |
| Class M | Throughout 2025 | 0 % | N/A |
| Class K | Up to 30 Sep 2025 | 4.10 % (if > €5,200/year) | N/A |
| From 1 Oct 2025 | 4.20 % | N/A |
Why PRSI Compliance Is Essential:
Incorrect classification or failure to deduct PRSI can impact access to benefits and lead to compliance issues. As part of Payroll Ireland 2025, reviewing your PRSI classes and ensuring proper setup is vital.
⚖️ USC – Universal Social Charge
USC (Universal Social Charge) is a mandatory deduction based on gross income. Unlike PAYE, there are no tax credits to offset USC. Under Payroll Ireland 2025, the USC bands and rates remain essential for accurate payroll calculation.
USC Rates for 2025:
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First €12,012: 0.5%
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Next €15,370: 2%
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Next €42,662: 4.5%
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Income above €70,044: 8%
Why It Matters:
Failure to properly calculate USC may lead to underpayment of tax, triggering audits or penalties. Accurate USC calculation is a key compliance factor in Payroll Ireland 2025.
You can learn more about USC bands, exemptions, and rates on Revenue’s USC breakdown and exemptions.
🧾 Understanding Payslips and Payroll Calculation
Under Payroll Ireland 2025, transparency in payslip reporting is critical. Whether you pay yourself or your employees, each payslip must clearly show:
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Gross Pay – Total earned before deductions (salary + bonuses + overtime)
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Deductions – Itemised PAYE, PRSI, USC, and pension contributions
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Net Pay – Take-home pay after deductions
As a company director, you must use the same payroll system when paying yourself. Deductions are applied as they would be for any employee, ensuring fairness and compliance.
🧑💼 Automatic Pension Enrolment: What Employers Should Know
New regulations under Payroll Ireland 2025 include automatic pension enrolment. All eligible employees — including directors paid a salary — will be automatically enrolled in a workplace pension scheme.
Key Points:
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Contributions are deducted from salary.
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Employers are also required to contribute.
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Non-compliance may result in penalties or audits.
Why This Matters:
Automatic enrolment supports long-term financial well-being for employees and ensures businesses are part of national pension reform initiatives.
📊 RizFin’s Approach to Payroll Ireland 2025
At RizFin, we simplify Payroll Ireland 2025 by handling the process from start to finish. We calculate, file, and manage all payroll elements on your behalf using a secure client portal.
Our Payroll Process Includes:
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Gross Pay: We account for all compensation.
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PAYE, PRSI & USC: We calculate and deduct based on current Revenue rules.
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Pension Contributions: Automatic enrolment handled in line with 2025 updates.
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Payslip Delivery: Sent securely, with full transparency.
Whether you’re managing multiple employees or just paying yourself a director’s salary, RizFin ensures everything is compliant and on time.
📅 Payroll Ireland 2025: Important Filing Deadlines
To stay compliant, employers must meet strict deadlines in 2025:
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Payroll Submission: Must be filed monthly by the 14th of the following month.
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Pension Contributions: Deducted during payroll and submitted to the pension provider on schedule.
Late filings can incur Revenue penalties, so a proactive payroll process is essential under Payroll Ireland 2025.
💬 Have Questions About Payroll or Payslips?
Payroll in Ireland can be complex — but you’re not alone. At RizFin, we explain every line on your payslip and make sure you understand what’s being deducted and why. We’re here to make Payroll Ireland 2025 straightforward, accurate, and stress-free.
📥 Ready to Simplify Payroll Ireland 2025?
Let RizFin handle your payroll so you can focus on growing your business. From PAYE and PRSI to USC and pensions, we take care of every step. Contact us today to ensure your business stays compliant under Payroll Ireland 2025.
