Payroll Definitions Ireland

This is a glossary of terms used within payroll, together with a description of each payroll term.

PPS Number Ireland

A Personal Public Service (PPS) number is a unique identifier used by statutory bodies for tax purposes and when people need to access social welfare benefits, public services, and information in Ireland. Other previous names were, Pay Related Social Insurance Number (PRSI Number), Social Insurance Number, Revenue and Social Insurance Number (RSI Number).

Employers Registered Number (ERN)

Gross Pay

The total amount a person is paid before any deductions are made and includes,wages, salaries, notional pay, bonuses, premium payments allowances, overtime etc

Overtime

Overtime is work done outside normal working hours. Employers have no statutory obligation to pay employees for work completed in overtime. However, many employers pay employees higher rates of pay for overtime. A contract of employment should state whether one is required to work overtime and should set out the rates of pay where one is to be paid for it.

Premium Pay

If an employee works at night on Sundays or other unsociable hours, entitlement to extra pay may be agreed between the employee and their employer. Under the Organisation of Working Time Act 1997-night work means work done between midnight and 7am.

Holiday_Premiu_Pay

Additional compensation for HSE staff for losing out on premium payments while on holidays. Premium payments for holiday pay purposes are based on an average of premium earnings (exclusive of overtime), calculated over the 12 month period preceding the annual leave year in which annual leave is being granted. This payment is normally made on a designated date or dates as agreed as agreed at each location.Ref: C.f. Department of Health Circular No. S100/412

Company Share-Based Remuneration

This involves payment through shares in the employer company or a company that controls the employer company. This information is included in Pay for Income Tax. Employers commonly use shares in companies as a mechanism for rewarding, incentivising, and retaining employees. In general, income tax is chargeable on the shares acquired by the employees, where the shares are acquired free of charge or at a discounted price.

Benefit-in-Kind

A term used by Revenue to refer to a taxable non-cash payment to an employee, for example, the use of a car, preferential loans, or subsidised accommodation. A benefit-in-kind (BIK) is any non-cash benefit of monetary value that employers provide for employee. These benefits can also be referred to as notional pay, fringe benefits taxable benefits or perks. The benefits have monetary value, so they must be treated as taxable income.BIK amount excludes company share-based remuneration but includes shares in other companies that are not a company that controls your company.

Sick Pay or Illness Benefit

There is no legal right to sick pay, but an employer may decide to pay an employee while they are off sick. If an employee has enough social insurance contributions and a certificate of “Incapacity for Work” from their GP. they can make a claim for Illness Benefit.

Enhanced Illness Benefit for COVID-19

This payment is available to employees who cannot work in the short term because they have been diagnosed with COVID-19 (Coronavirus) or they have been medically certified to self-isolate/restrict their movements due to being a probable source of infection of COVID-19 (Coronavirus). They must be absent from work and confined to their home or a medical facility.
The application process is the same as Illness Benefit and an employee needs to be medically certified by their GP or the HSE. They may not need to attend their GP in person if you have been advised by the HSE. In that case they will have received a letter or text, and this can act as certification for their claim.
The personal rate for this payment is €350 per week, as compared with the normal Illness Benefit rate of €203. It will be paid for a maximum of 2 weeks where a person is self-isolating due to being a probable source of infection, and for a maximum of 10 weeks if a person has been diagnosed with COVID-19 (Coronavirus). If a person has been certified for less than 10 weeks, they will be paid for the duration of their certificate. People whose sole income is their Social Welfare payment need not apply as they will keep their existing payment.

Maternity Benefit

Maternity leave is leave from work for a woman who is pregnant or who has just given birth. Maternity Benefit is a payment for employed, pregnant women, to help support them while on Maternity Leave from work.

Maternity Benefit Qualification Criteria

A woman must be pregnant or have recently given birth.
A woman must be in or have very recently ended employment.
A woman must have enough PRSI contributions.
A woman must have a completed MB2 from her employer.

Paternity Leave

Paternity leave is leave from work for a parent (other than the mother) following the birth or adoption of a child. There is a statutory entitlement to paternity leave in respect of births or adoptions that occur on or after 1st September 2016.

Net Pay

Net pay is the take-home pay an employee receives after payroll deductions. One can calculate net pay by subtracting deductions from the gross pay. Net Income is the money taken home after all taxes and voluntary contributions have been deducted from your gross salary. The total amount of pay after tax, PRSI, and Universal Social Charge USC and other deductions are made from gross pay is net pay.

Pay as You Earn (PAYE) Ireland

Pay as You Earn is the system name for deducting income tax, PRSI and USC from a person’s wages or salary. Employees normally pay tax through PAYE and every time their salary is paid, their employer deducts Income Tax (IT), Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) and pays the amount deducted to Revenue.

Income Tax

The tax deducted from or refunded to employees is Income Tax. Income tax in Ireland in 2020 makes up approx. 40% of the Government’s tax revenue and is paid by approx. 40% of the adult population. The income tax system in Ireland is complex, dynamic and is made up of several different rates, credits, bands, and reliefs.
Taxes paid on people’s income comprises of Income Tax and Universal Social Charge (USC). Pay Related Social Insurance (PRSI) should also be included to give a full picture of a person’s contribution, although PRSI is technically not a tax because social insurance contributions are paid to the Social Insurance Fund to provide the Contributory State Pension and other entitlements.

Taxable Pay

Pay for Income Tax or Taxable pay is gross pay less any contributions amounts that are deducted from gross pay before an employer calculates employee’s tax. Example are:
Revenue approved pension scheme.
Revenue approved Permanent Health Benefit (Income Continuance) scheme.
Salary Sacrifice Arrangement.
Personal Retirement Savings Account. PRSAs are a type of pension arrangement.
Retirement Annuity Contract (RAC).
Tax Credit and Universal Social Charge Certificate

A Tax Credit Certificate (TCC) lists for the tax year a person's:
Tax Credits
Tax Reliefs
Tax CreditS Reduced By
Gross Tax Credit Reductions
Tax Rate Bands
Band 1 Credit Reduction
Universal Social Charge (USC) Rates
Universal Social Charge (USC) Bands

Tax Rate Band

The amount earned each time a person is paid before they must pay the higher rate of tax. Every time a person is paid, they pay tax at the standard rate of tax up to what used to be referred to as their standard rate cut-off point or SRCOP. A tax rate band is the amount of income which will be taxed at a particular percentage. rate. The current 2021 tax rates are 20% and 40%. A portion of income is taxed at 20% and the remainder will be taxed at 40%.

Tax Credit

Everyone is entitled to tax credits, based on their personal circumstances, e.g., if they are married or in a civil partnership or are a PAYE employee etc. Tax credits are allocated each year and tax is calculated as a percentage of a person’s income. Tax credits are deducted from this to give the amount of tax a person will pay.
Any unused credits are forwarded to the next pay period(s), for PAYE workers with Tax Credit Certs issued on a cumulative basis. Tax credit carried forward will reduce the tax by the amount of the credit in the next pay period.

Offset Against PAYE

Offset against PAYE on your statement of liability means that a refund due is reduced by any money owed for a previous year. This situation arises for many PAYE workers following their Income Tax Return for 2021 because many people overpaid tax because of PUP or Illness benefit payments which were subject to tax in real time. The process used by revenue for this real time tax resulted in PAYE workers been overtaxed in 2021. Tax underpaid in 2020 on PUP and TWSS was to be collected by reducing tax credits over a four-year period commencing in 2022. Howeve, a note was included on the 2020 Statement of Liability stating that all future refunds will be automatically offset against this underpayment until it is fully collected.

Band 1 Credit Reduction

A person’s standard rate cut-off point, and credits can be reduced by Revenue, and depending on the amount of the reductions, they may also have a band 1 credit reduction. This has arisen in 2021 for thousands of recipients of the Pandemic Unemployment Payment PUP. A message shows on their Tax Credit as follows: “Tax Credits Reduced by DSP PUP Payment”. When the tax credit reduction is greater than the tax credits a person has, this will end up as a negative tax credit and a further reduction of the tax band.

Tax Credits Reduced by DSP PUP Payment

In 2021 with the process of taxing PUP in real time The Department of Social Protection notifies Revenue of Pandemic Unemployment Payment (PUP) amounts paid to recipients on or after 12th January 2021 i.e., earned in 2021. Revenue reduces the person’s tax credits and 20% standard rate cut-off point SRCOP, by the weekly amount of PUP multiplied by 52. So, for example someone paid €350 per week PUP on or after 12th January 2021 will have their Tax credit reduced by €3,640 and SRCOP is reduced by €18,200 (350*52). €18,200 * 20% = €3,640. The adjusted tax credits and the 20% SRCOP are applied on a Week 1 / Month 1 basis. For those seeing a Band 1 Credit Reduction of - €340 means that Revenue is attempting to reduce their Tax Credits by €3,640 when they only gave them €3,300. It is like Revenue gave them 3 apples and are trying to take 5 back from them.

Week 1/Month 1Basis

A PAYE worker may receive a Tax Credit Certificate (TCC) on the week 1 basis also known as the “non-cumulative basis”. This means that their employer will deduct Income Tax (IT) from their pay on a week-to-week basis. Yearly tax credits and rate bands are not backdated to the 1^st of January and do not accumulate for each pay period. Employer cannot make any refunds of IT that may be due until a ‘cumulative’ TCC is issued.
If an employee is still on the week 1 basis at the end of the year, they must submit an Income Tax Return via PAYE Services in myAccount. Revenue will then review their tax position for the year.

Income Tax Return

An income tax return is a form filed with Revenue that reports income, and other tax information. Tax returns allow taxpayers to calculate their tax liability, schedule tax payments, or request refunds for the overpayment of taxes. All Pay As You Earn (PAYE) customers must complete an Income Tax Return to:

claim additional tax credits or reliefs, for example medical expenses

declare additional income, for example rental income or income from casual work.

obtain a Statement of Liability for the year

claim refunds of any tax or USC overpaid.

confirm any liability of any tax or USC underpaid.

The quickest and easiest way to complete an Income Tax Return is through PAYE Services in myAccount. Income Tax Return submissions must be made within four years after the end of the tax year to which the return relates. For all years, an Income Tax Return must be completed to claim additional tax credits or declare additional income. This can be done by following these steps:

sign in to myAccount.

click the Review your tax 2017 - 2020 link in PAYE Services.

select Submit Income Tax Return’ for the appropriate year.

If a person is unable to use myAccount they must complete and submit a paper Income Tax Return to receive a Statement of Liability.

Statement of Liability

The Statement of Liability is a final review of a PAYE worker’s tax liability for a tax year. It was previously known as the P21 End of Year Statement. Since 1st January 2020, PAYE workers must complete an income tax return to request a Statement of Liability.

Year-end Tax Underpayments

This can happen if one has taxable earnings during a year which have not been taxed at source or that one has been allocated tax credits that they are not entitled to. Revenue will usually seek reimbursement over the course of the following year by making an adjustment to tax credits.
In the case of Tax due on TWSS and PUP in 2020, Revenue will not be reducing credits and tax bands until 2022 and repayments will be spread over 4 years.
This means PAYE workers take-home pay will be reduced until the underpayment is settled. Sometimes underpayments go unnoticed by Revenue for several years and the taxpayer is then faced with a much bigger underpayment.

Year-end Tax Overpayments & Tax Rebates Ireland

An overpayment of tax happens when a person paid more tax than they were liable to pay. If a person has overpaid tax, they will get a tax refund. PAYE workers may have overpaid tax if they become unemployed or are out of work sick. Taxpayers may also have overpaid tax if their tax credits are incorrect, or they have not claimed tax relief for certain eligible for tax relief expenses. PAYE taxpayers must claim a tax refund within 4 years of the end of the year in which the overpayment arose or you will not get a refund.
There are some items that have been eligible for claiming tax rebates on for many years such as medical expenses and certain dental expenses, and some are new like:

Stay and Spend Incentive

To encourage people to spend money on accommodation and food in Ireland, the Government introduced a Stay and Spend Incentive. The staycation tax back scheme allows taxpayers to claim a certain amount of tax back on accommodation, food and non-alcoholic drink bought between 1 October 2020 and 30 April 2021 – known as qualifying expenditure. One can submit receipts up to a total of €625, or €1,250 for a jointly assessed married couple, for the staycation tax rebate.

Working from Home Tax Relief

The COVID-19 emergency has had a big impact on working life in Ireland. Companies are asking staff where possible to work from home to prevent the spread of the virus. Working from home or e-working is where an employee works from home for substantial periods on a full-time or part-time basis.
Taxpayers may be able to claim tax relief on the additional costs of remote working, including electricity, heat and broadband.

Employment Detail Summary (Formerly P60)

An Employment Detail Summary is available to PAYE workers through Revenue’s myAccount service. It contains details of pay as well as the income tax, PRSI and Universal Social Charge (USC) that has been deducted by a person’s employer and paid to Revenue.

P60 End of Year Certificate (P60)

The P60 was a certificate providing a summary of the tax, PRSI and USC deducted by your employer in the tax year. It was an important document which was required when one was applying for grants or benefits. Every employer was obliged to deduct tax based on the tax-free allowance certificate issued to them by Revenue. Up until 2019, employers issued P60’s to their employees at the end of the year. But in 2019, P60's were abolished and replaced with an online End of Year Statement, which you can access using Revenue's myAccount service.

Video on “How to get your Statement of Liability for 2020”.

https://www.revenue.ie/en/jobs-and-pensions/end-of-year-process/the-statement-of-liability.aspx

Video on “How to get your Statement of Liability for 2020 where you received Pandemic Payments”.

https://www.revenue.ie/en/jobs-and-pensions/end-of-year-process/the-statement-of-liability.aspx

Revenue Payroll Notification Number (RPN)

This is the Notification from Revenue made available to employers and is used to calculate deductions. The RPN replaced the P2C. An up-to-date RPN is retrieved from Revenue for each employee before employers run their payroll. This ensures employers are using the correct credits and cut-off point for their employees.The RPN provides employers with the necessary information to deduct from the employee the correct:
Income Tax (IT)
Universal Social Charge (USC)
Local Property Tax (LPT).

It shows:
tax credits
IT and USC cut-off points
any previous pay, tax and USC deducted from 1 January (unless the certificate is on a week 1 or month 1 basis)
IT and USC exemptions
the amount of LPT to be deducted, if applicable.

P2C

A P2C was the employer copy of employee's Tax Credit Certificate. It showed the total amount of tax credits and tax and Universal Social Charge (USC) cut-off points assigned to this employment. any previous pay, tax and USC deducted from 1st January (unless the certificate is on a week 1 or month 1 basis).

Week 53

This applies when there are 53 weekly pay days in the year and occur infrequently. This occurs when a pay day falls on 31st December. In the case of a leap year, on 30th or 31st December.
Additional pay days can apply to employees who are paid on a weekly, fortnightly, or 4-weekly basis. It does not affect monthly-paid employees.
Regulation provides that the employer should use the latest Revenue Payroll Notification (RPN) to deduct income tax on a Week 1 basis.

Cessation Certificate (Formerly P45)

If an employee left their job before 2019, their employer would give them a P45 form giving details of pay, tax, USC and PRSI contributions deducted from the start of the tax year to their last day of the job. In 2019, P45's were abolished and replaced with an online system called PAYE Modernisation. From January 2020, when an employee leaves a job their employer will enter their leaving date and details of their final pay and deductions into Revenue's online system and the employee can access these details through Revenue's myAccount.

Pay Deductions

The difference between Gross Pay and Net Pay is withheld deductions. Payroll deductions are amounts withheld from an employee’s pay each pay period. There are both statutory and voluntary deductions.

Voluntary Deductions

Voluntary deductions include health, life insurance, unions, retirement plans etc, Voluntary deductions may be Revenue approved and not included in taxable pay or taxable deduction which are not taken off gross prior to tax calculation.

Statutory Deductions

Statutory Deductions are required by law. The types of payroll deductions that are statutory include income taxes, and PRSI.

Pay Related Social Insurance (PRSI) Ireland

Pay Related Social Insurance means the social insurance contributions deducted from wages. The term “insurable employment” is used to describe employment that is liable for PRSI contributions. PRSI is “Pay Related Social Insurance” contributions which go towards Social Welfare benefits and pensions and enable people to qualify for social welfare payments such as Old Age Pension, Illness Benefit and Maternity Benefit.
Revenue collects PRSI contributions in most cases through the Pay-As-You-Earn (PAYE) income tax system. Most people working in Ireland must pay this with few exceptions. PRSI is a payment made by employers and employees. The value of this payment is based on the amount of employee's pay. PRSI is the main source of funding for social welfare payments. Pay Related Social Insurance (PRSI) contributions go to the Social Insurance Fund (SIF) which helps pay for Social Welfare benefits and pensions.
Most employers and employees (between the ages of 16 and pensionable age, currently 66 years) pay social insurance (PRSI) contributions into the national SIF. The SIF consists of monies collected from people in employment. This money is then used to fund social insurance benefits. The investment account is a savings account that is managed by the Minister for Finance.

Employees PRSI

An Employee's share is the amount of PRSI an employee pays on their own pay. The total amount paid for an employee in one pay period is called a PRSI contribution.

Employers PRSI

Employer, record and pay PRSI contributions for all employees aged 16 and over. The employer’s share is the amount of PRSI employers pay based on employee's pay.

PRSI Class

PRSI contributions are divided into different categories, known as PRSI classes. This determines the rate of PRSI, or rate of contribution employees are liable to pay.
The class and rate of contribution paid is determined by the nature of the employment and weekly earnings. For example, a person employed in a supermarket earning less than €38 per week will be insured under Class J. If that person earned over €38, they would probably be insured under Class A. Most private sector workers are liable to pay Class A PRSI. There are a variety of PRSI classes (A, B, C, D, E, H, J, K, M, S, and P) and subclasses (such as A1, J0, CX, etc.).
Each employee has a PRSI contribution class. The Department of Social Protection provides details of each PRSI class, and the PRSI contribution rates. The class of PRSI paid determines the social welfare benefits for which a person may qualify. The range of benefits include the likes of the State Pension (Contributory), Jobseeker’s Benefit and Illness Benefit. An entitlement to a benefit is dependent on a person meeting specific criteria.

PRSI Subclass

There are currently 11 different PRSI classes in 2021. Each PRSI class is in turn divided into different subclasses. These subclasses do not affect entitlements under the social insurance system. They only relate to the amount of PRSI which employees or their employers must pay.

Universal Social Charge (USC)

USC or the ‘Universal Social Charge’, is a tax that has replaced the income levy and health levy. USC is a tax payable on total income, but there are some types of income that are exempt. All payments from the Department of Social Protection (DSP) are excluded from gross pay for USC purposes. This includes PUP and Illness Benefit. USC is at the standard rate or the reduced rate, dependant on one’s circumstances.

If a person’s circumstances change, for example, being granted a medical card, Revenue must be contacted as there is a reduced rate of USC for Medical Card Holders and only Revenue can apply it to peoples Tax Certificates.

Paid Leave

Absences from work can be split into two types paid leave and unpaid leave. Entitlement to paid leave from work is set out in legislation and in an employee’s contract of employment. Legislation gives various entitlements to leave from work, including annual leave and public holidays. Maternity leave, paternity leave, adoptive leave, carer's leave, parental leave, and other types of leave from work can have an element of pay from an employer included. It is also important to note that the periods of leave provided for by legislation are the minimum entitlements only, employees and employers may agree to additional entitlements.

In the case of agency employees, the party who pays the wages (employment agency or client company) is the employer for the purposes of the Organisation of Working Time Act 1997 and is responsible for providing the entitlement.

Annual Leave

A holiday is paid time off work for rest and recreation. It can mean either annual leave or a public holiday. Entitlement to annual leave or holidays from work is set out in legislation and in your contract of employment. The Organisation of Working Time Act 1997 provides for a basic annual paid leave entitlement of 4 weeks, although an employee's contract could give greater rights. For example, companies in the Construction Industry Federation which is the Irish construction industry’s representative body have 21 days annual leave which are often referred to as Builders Holidays.

Calculating Annual Leave

Under Section 19 (1) of the Act full time employees are entitled to a basic annual paid leave entitlement of 4 weeks. There are 3 different ways of calculating your annual leave entitlement:

1.     Based on the employee's working hours during what is called the leave year, which runs from April to March. An employee who has worked at least 1,365 hours in a leave year is entitled to the maximum of 4 working weeks paid annual leave unless it is a leave year in which they change employment. Many employers use the calendar year (January-December) instead of the official leave year to calculate entitlement.

2.     By allowing 1/3 of a working week for each calendar month in which the employee has worked at least 117 hours.

3.     8% of the hours worked in the leave year, subject to a maximum of 4 working weeks.

An employee may use whichever of these methods gives the greater entitlement. When calculating the entitlement, employers should include all hours worked including time spent on annual leave, maternity leave, parental leave, force majeure leave, adoptive leave or the first 13 weeks of carer’s leave.
An employee who has worked for at least 8 months is entitled to an unbroken period of 2 weeks' annual leave. Generally, the annual leave for part-time workers is calculated using the 3rd method, that is, 8% of hours worked. If a person works full time for some months and the rest of the year works part time, they should calculate the leave for the full-time and the part-time periods of work separately.

Public Holidays

Public holidays may commemorate a special national day or other event, for example, Saint Patrick's Day (17 March) or Christmas Day (25 December). There are currently 9 public holidays in Ireland in the year. On a public holiday many businesses and schools close. Most businesses in the hospitality sector will remain open on public holidays. Other services, for example, public transport still operate but often with restricted schedules. Public holidays are:

Public Holiday Dates in Ireland

New Year's Day (1 January)
Saint Patrick's Day (17 March)
Easter Monday
First Monday in May
First Monday in June
First Monday in August
Last Monday in October
Christmas Day (25 December)
Saint Stephen's Day (26 December)

For the year 2021 this equates to:

Friday, Jan 1st, New Year’s Day
Wednesday 17th March, St Patricks Day
5th April, Easter Monday
May 3rd, May Public Holiday
Monday, June 7th, June Public Holiday
August 2nd, August Public Holiday
Monday, October 25th, October Public Holiday
Saturday 25^th December Christmas Day
Sunday 26^th December St Stephens Day

Qualifying Rules for Public Holidays Entitlement

A person’s entitlement to public holidays and the appropriate rate of daily pay is set out in the Organisation of Working Time Act 1997. Most employees are entitled to paid leave on public holidays. One exception is part-time employees who have not worked for their employer at least 40 hours in total in the 5 weeks before the public holiday. If an employee qualifies for public holiday benefit, they are entitled to one of the following:
A paid day off on the public holiday.
An additional day of annual leave.
An additional day's pay.
A paid day off within a month of the public holiday.

Employees may ask employers at least 21 days before a public holiday, which of the alternatives will apply. If the employer does not respond at least 14 days before the public holiday, employees are entitled to take the actual public holiday as a paid day off.

Public Holidays Falling on a Weekend

If a public holiday falls on a weekend, workers do not have any automatic legal entitlement to have the next working day off work. If a public holiday falls on a day that is not a normal working day for a business (for example, on Saturday or Sunday), employees are still entitled to the benefit for that public holiday by one of the following.

A paid day off within a month of the public holiday.
An additional day of annual leave.
An additional day’s pay.

Public Holidays on a Normal Working Day

Where the public holiday falls on a day on which the employee normally works, the employee is entitled to a full day’s pay for the public holiday, if they do not work on the day i.e., as if they had done their normal hours on that day. If they work on the holiday, they should also get their usual pay on top of the public holiday entitlement.

Public Holidays on an Employee Non-Working Day

Where the public holiday falls on a day on which the employee does not normally work, the employee is entitled to one-fifth of his/her normal weekly wage for the public holiday. If weekly pay varies, then the employer uses an average of the weekly pay over the last 13 weeks prior to the public holiday and divides it by five.

Public Holidays Entitlement for Part-time Employees

An employee whose normal hours of work are less than the normal hours of work of a comparable full-time employee. When an employee has worked for an employer at least 40 hours in the 5 weeks before the public holiday and the public holiday falls on a day the employee normally works, the employee is entitled to a day's pay for the public holiday. If they are required to work that day, they are entitled to an additional day's pay.

Qualifying part time employees who do not normally work on the public holiday should receive one-fifth of their weekly pay. Even if they are never rostered to work on a public holiday, they are entitled to one-fifth of their weekly pay as compensation for the public holiday.

Force Majeure Leave

The Parental Leave Acts 1998 and 2019 give an employee a limited right to leave from work known as force majeure leave. Force majeure leave is absence from work for an employee for urgent reasons because of the illness or injury of a family member a family crisis. It arises where, for urgent family reasons, the immediate presence of the employee is indispensable owing to an injury or illness of a close family member. Force majeure leave does not give any entitlement to leave following the death of a close family member. A close family member is defined as one of the following:

A child or adopted child of the employee.
The husband, wife, or partner of the employee.
Parent or grandparent of the employee.
Brother or sister of the employee.
Person to whom the employee has a duty of care (that is, he/she is acting in loco parentis).
A person in a relationship of domestic dependency with the employee.
Persons of any other class (if any) as may be prescribed.

The maximum amount of leave is 3 days in any 12-month period or 5 days in a 36-month period. A person is entitled to be paid while on force majeure leave subject to the approval of their application by their employer.

Bank Holiday

Bank holidays are sometimes referred to as public holidays and vice versa which causes endless debate and confusion about pay, especially at Easter and Christmas time. There is already enough confusion about entitlement to bank holiday pay in Ireland and what days are bank holidays. For example,  many people are unsure if Christmas Eve and New Year’s Eve are bank holidays. Christmas Eve and New Year’s Eve are not bank holidays or public holidays.
All public holidays are bank holidays, but all bank holidays are not public holidays. In 2021 Good Friday. Monday 27th December and Tuesday 28th December are bank holidays but not public holidays. While some schools and businesses close on these days, there is no automatic entitlement to paid time off work on these days unless it is included as a paid holiday in the employees’ contract of employment, e.g., companies in the Construction Industry Federation. The following days in 2021are not public holidays and workers are not entitled to public holiday entitlements for those days under the Organisation of Working Time Act, 1997.

Good Friday 2nd April 2021 (Banks closed – not a Public Holiday)

Monday 27th December 2021 (Banks closed – not a Public Holiday)

Tuesday 28th December 2021 (Banks closed not a Public Holiday)

Breaks and Rest Periods Ireland

Short periods of time for rest and refreshment taken during working hours. All workers are entitled to have breaks while they are at work and rest periods between working days or nights. The Organisation of Working Time Act 1997 sets out employee’s statutory minimum entitlements for the working week, annual leave, night work, breaks and rest periods. A break allowed to an employee at the end of the working day shall not be regarded as satisfying the requirements of the Act.

Work Breaks:

Greater Than or Equal 4.5 Less Than 6 hour shift:     15 minutes
Greater Than or Equal 6 Less Than 10.5 hour shift:    30 minutes
Greater Than or Equal 10.5 Less Than 12 hour shift:  45 minutes
Greater Than or Equal 12 Less Than 13.5 hour shift:  60 minutes

The most popular work schedule is an 8-hour shift for which an employee is entitled to a 30 minute or half an hour break. Employees are entitled to a 15-minute break where 4.5 hours or more have been worked and a 30-minute break where 6 hours or more have been worked, which may include the first break. The provisions of the Organisation of Working Time Act 1997 on breaks and rest periods do not apply to all employees in all sectors in the same way. Although many do in some way employers are not statutorily obligated to pay for breaks.

Collective Agreements

Collective Agreements are negotiated between unions and employers about terms and conditions of employment. In addition to arrangements such as the national minimum wage or living wage, some employees are covered by agreements such as “A Registered Employment Agreement” (REA) which is a collective agreement between a trade union or unions of workers and employers on the pay or conditions of specified workers, which is registered with the Labour Court and is only binding on the parties that subscribe to it.

Contract of Employment

A contract of employment exists if a person is offered work in return for wages and accepts the offer. An employee is a person who works for another person in return for payment. The employment status of a person is generally determined by Revenue or the Department of Social Protection.

Wages

Wages are the monies paid by employers to employees for the time they are working. Wages are also known as pay, salary, emoluments, or remuneration.

Minimum Wage

This is a minimum hourly rate of pay. Most employees have a legal right to the national minimum wage (NMW). The national minimum hourly rate will become €10.20 on 1 January 2021.

Category of Employee    Hourly Rate
Adult Worker                    €10.20
Under 18 Years of Age      €7.14
Aged 18 Years of Age       €8.16
Aged 19 Years of Age       €9.18

Living Wage

The Low Pay Commission formally begun work in April 2021 on examining how Ireland can move towards a living wage. The Government committed to progressing to the wage over its lifetime so a living wage could be introduced by 2025 under plans launched by the Government in April 2021. The Low Pay Commission makes recommendations to the Minister for Enterprise, Trade and Employment on a minimum living wage that is fair and sustainable. The Living Wage is set to replace the current minimum wage with one based on the cost of living, defined as the minimum income needed for a single full-time worker without dependents to meet basic needs and afford an acceptable standard of living.

Employment Permit

To work in Ireland, a non-EEA National, unless they are exempted, must hold a valid Employment Permit as outlined by the Department of Enterprise, Trade and Employment. Either the employer or the employee can apply for a General Employment Permit to the Department of Enterprise, Trade and Employment which must be based on an offer of employment and must have a minimum annual remuneration of €30,000 as at 2021 rates. Permits are issued to the employee and include a statement of the employee's rights and entitlements. An employee with an employment permit has all the employment rights of Irish or EEA citizens for the duration of the employment permit.

Redundancy

Redundancy is when a person’s job ceases to exist because of lack of work or an employee’s company closing. When a person loses their job due to circumstances such as the closure of the business or a reduction in the number of staff this is known as redundancy.
The Redundancy Payments Acts 1967–2014 provide a minimum entitlement to a redundancy payment for employees who have a set period of service with the employer. Not all employees are entitled to the statutory redundancy payment, even where a redundancy situation exists. Statutory redundancy only applies to employees with two years' service When a person qualifies for redundancy, there are specific redundancy procedures which employers and employees must follow to comply with the legislation.

The statutory redundancy payment is a lump-sum payment based on the pay of the employee. All eligible employees are entitled to two weeks' pay for every year of service they have since they were 16 and one further week's pay.

The amount of statutory redundancy for the current year 2021, is subject to a maximum earnings limit of €600 per week (€31,200 per year). The statutory redundancy payment is tax-free.

Gross Weekly Pay for Redundancy Calculation

Gross Pay refers to current normal weekly pay including average regular overtime and benefits-in-kind, but before tax and PRSI deductions. For persons paid monthly, normal monthly pay is divided by 4.33 to calculate the weekly pay. Where one does not have regular hours or regular pay, an average of the last 52 weeks worked is used.

How to Apply for Redundancy Pay

On the date of the termination of employment a person’s employer should pay the redundancy lump sum due to the employee. If the employer has not paid redundancy lump sum, the employee should apply to their employer for it using form RP77 (pdf). If the employer still does not pay it, the employee can apply to the Department of Social Protection for direct payment from the Social Insurance Fund. If an employer refuses to pay redundancy lump sum or if there is a dispute about redundancy an employee can bring a claim to the Workplace Relations Commission. An employee must complete the following steps:

1.     Use the online complaint form available on workplacerelations.ie. within one year of your dismissal.

2.     Apply to the DSP for your lump sum by completing the RP50 form online. If the company has been liquidated or is in receivership, the form RP50 should be completed by the liquidator or receiver on behalf of the employees.

3.     Print off a copy of the form and sign it.

4.     Send the form to the Redundancy and Insolvency Section of the DSP with a copy of the Workplace Relations Commission decision.

Pay Frequency

Pay frequency defines how often the employee is paid. The most common are weekly, fortnightly, four-weekly, monthly, or twice-monthly.

Pay Date

Date paid’ in the context of PAYE modernisation is defined as the date on which the funds are made available. These dates can be different dependent on how the employer makes payment to the employees. If the employee is paid by:

a.      cash, it is the date the cash is given to the employee.

b.     cheque, it will be the date on the cheque.

c.      bank transfer, it is the date which the funds are scheduled to be made available in the individual’s bank account.

Where a payday falls on a non-bank working day and employee payments are due, Revenue regard that day as payday. This occurs provided the funds are made available to the employee on the previous bank working day.

Temporary Wages Subsidy Scheme (TWSS)

Revenue operated the Temporary Wage Subsidy Scheme (TWSS) from 26th March 2020 to 31st August 2020. It enabled employees, whose employers were affected by the pandemic, to receive significant supports directly from their employer. The TWSS ended on 31st August 2020 and was replaced by the Employment Wage Subsidy Scheme (EWSS). TWSS was not taxable in real time through the PAYE system. However, it was a taxable source of income in 2020 for the specified employee, and liable to Income Tax and USC, at the end of the year 2020.

Employment Wage Subsidy Scheme (EWSS)

Under the Government’s July Jobs Stimulus Package the Employment Wage Subsidy Scheme (EWSS) replaced the Temporary Wage Subsidy Scheme (TWSS) from 1st September 2020. The latest update as at April 2021 is that the EWSS will run until 30th June 2021. The government wage subsidy scheme end date may of course be extended by the Minister for Finance.

Pandemic Unemployment Payment (PUP)

Pandemic Unemployment Payment (PUP) is a social welfare payment for employees and self-employed people who have lost their employment in 2020 due to COVID-19. Covid 19 payment updates have seen the covid payment extended and covid payment rates changed. The COVID-19 Pandemic Unemployment Payment will continue to be paid until at least 30th June 2021. The pup rates have been amended over time and in April 2021 over 50% of recipients were on the €350 per week rate.

In 2020, the covid payment tax was not deducted at source. PUP was not taxable at the time of receipt from the DSP and was taxed as part of the end of year review. This ensured that individuals could register for and start to receive PUP as quickly as possible in 2020 following the outbreak of the pandemic. In 2021, PUP is treated like other DSP taxable payments and is taxable in real-time. When workers return to work and sign off covid payment they will pay any tax due on Pandemic Unemployment payments received.