Irish Payroll Glossary

Additional Voluntary Contribution

Also: AVC

An Additional Voluntary Contribution is an extra pension contribution made by an employee on top of the compulsory contributions to an occupational pension scheme. AVCs are usually made through an AVC PRSA or an in-scheme AVC arrangement and attract income tax relief at the marginal rate (20% or 40%) up to the age-related percentage limits applied to a maximum earnings figure of €115,000 for 2026. AVCs reduce taxable pay but not USC or PRSI pay, so net pay falls by less than the gross contribution. At retirement AVCs can be used to top up tax-free lump sum entitlement, buy additional pension or transfer to an ARF. AVCs are particularly useful for public servants whose superannuation accrual rate is below the maximum, and for older employees making last-minute pension provision.

Age Tax Credit

The Age Tax Credit is an additional non-refundable tax credit available to individuals aged 65 or older during the tax year. For 2026 the credit is worth €245 for a single or widowed person and €490 for a married couple or civil partners jointly assessed where either spouse is 65 or over. The credit reduces the income tax that an older worker or pensioner has to pay and is applied automatically by Revenue when they hold a date of birth on file. It sits on top of the Personal Tax Credit and, where the individual still has earnings, the Employee Tax Credit. People living entirely on the State Pension Contributory typically pay no income tax because the combined credits exceed the tax due, but the Age Tax Credit becomes meaningful for those with private pensions, ARF drawdown or continued employment after 65. It does not affect USC or PRSI. Where one spouse is over 65 in a jointly assessed couple, the full €490 is granted regardless of which spouse holds the income, so allocation through the RPN can be optimised in the spouse with the higher tax bill.

Agency Worker

An agency worker is an individual supplied by an employment agency to a hirer (the end user) to work temporarily under that hirer's direction. Under the Protection of Employees (Temporary Agency Work) Act 2012 agency workers are entitled to equal basic working and employment conditions as if they had been directly recruited by the hirer from day one. This includes pay, working time, rest periods, night work, holidays and public holidays. For PAYE purposes the agency is normally the employer and is responsible for operating PAYE, USC and PRSI on the wages it pays. The hirer reimburses the agency. Agency workers receive a payslip from the agency, not the hirer, and their RPN is issued to the agency. They build PRSI Class A contributions in the normal way and accrue annual leave at 8% of hours worked.

AMRF and ARF

Also: AMRF/ARF

An Approved Retirement Fund (ARF) is a post-retirement investment vehicle into which a member of a defined contribution scheme, PRSA or AVC can transfer their pension pot at retirement instead of buying an annuity. The fund continues to be invested and the holder draws income from it, with imputed distributions of 4% per annum from age 61 (5% from 71, 6% on funds over €2 million). The Approved Minimum Retirement Fund (AMRF) was abolished from 1 January 2022 (replaced by the specified income test of €12,700 per annum), but legacy AMRFs that had not been converted are now treated as ARFs. ARF drawdowns are subject to PAYE, USC and PRSI Class S (or Class M after age 66). They appear as pension income, not employment income, and require an RPN issued to the ARF provider as the deemed employer.

Annual Leave (Ireland)

Statutory annual leave in Ireland is governed by the Organisation of Working Time Act 1997. The minimum entitlement is the greater of: 4 working weeks where the employee has worked at least 1,365 hours in the leave year, one third of a working week per calendar month in which 117 hours are worked, or 8% of hours worked up to a maximum of 4 weeks. Many employers offer 21 to 25 days, with 20 days being the legal floor for a full-time five-day week. Annual leave is paid at the employee's normal weekly rate including regular allowances, shift premiums and average commission. Untaken statutory leave can be carried over within 6 months by agreement, and on termination the employer must pay the cash equivalent of any unused statutory leave. Public holidays are a separate, additional entitlement.

Auto-enrolment

Auto-enrolment is the working title sometimes used for My Future Fund, the Irish workplace pension scheme that began phased rollout in 2026. All employees aged 23 to 60 earning over €20,000 a year who are not already in a workplace pension are automatically enrolled. In the first three years employees contribute 1.5% of gross pay, employers match it with 1.5%, and the State adds 0.5% in the form of a contribution top-up. Contribution rates step up every three years to reach 6% employee, 6% employer and 2% State by year ten. Contributions are deducted from gross pay before income tax but after USC and PRSI. The scheme is administered by the National Automatic Enrolment Retirement Savings Authority (NAERSA). Employees can opt out after six months but will be re-enrolled automatically every two years.

Basic Pay

Basic pay is the contractual fixed element of an employee's remuneration, calculated by reference to the agreed annual salary, weekly wage or hourly rate, before any variable pay such as overtime, bonus, commission or shift premium is added. Basic pay forms the base for many other calculations, including statutory redundancy, holiday pay, notice pay and pension contributions. For a salaried employee on €52,000 a year paid monthly, basic pay each month is €4,333.33. For an hourly worker on €18 per hour and a 39-hour week, basic pay is €702 a week. Basic pay is fully subject to PAYE, USC and PRSI. It is the first line on most Irish payslips and the figure most employees quote when asked what they earn.

Benefit-in-Kind

Also: BIK

A Benefit-in-Kind (BIK) is a non-cash perk provided by an employer that has a cash equivalent value taxable through the payroll. Common BIKs include company cars, company vans, employer-provided accommodation, preferential loans, medical insurance paid by the employer and employer-provided car parking in designated areas. The taxable value (notional pay) is added to gross taxable pay so that PAYE, USC and PRSI are deducted on it, but no actual cash is paid to the employee, meaning net pay is lower than basic pay would suggest. For 2026 company car BIK is calculated using a CO2-banded percentage of original market value (9.75% to 37.5%) with the lower-emission Category A bands continuing to be the most favourable. Employers must value BIKs at the latest by 31 December each year and report them in real time through PAYE Modernisation.

Bonus

A bonus is a payment over and above contractual basic pay, awarded for individual, team or company performance, on completion of a project, at year-end, or as a one-off recognition payment. Bonuses are fully subject to PAYE, USC and PRSI in the pay period in which they are paid, which often pushes the employee's pay for that month above the monthly Standard Rate Cut-Off Point and into the 40% band. Tax credits and the SRCOP for the year are spread evenly across pay periods on a cumulative basis, so any apparent over-deduction in the bonus month is usually balanced by lower deductions later in the year. Bonuses can be paid in cash or, with care, as restricted shares or via approved share schemes for more favourable treatment, but cash bonuses get no special tax relief.

Capital Gains Tax

Also: CGT

Capital Gains Tax is the tax on chargeable gains made on the disposal of assets such as shares, second properties, business interests and investment funds. The standard rate for 2026 is 33%, with a higher rate of 40% on certain offshore funds and life policies. An annual personal exemption of €1,270 is available to each individual (not transferable between spouses for a single asset). CGT is self-assessed: gains made between 1 January and 30 November are payable by 15 December that year; gains made in December are payable by 31 January following. CGT is not deducted through PAYE and is reported on a Form CG1 or Form 11 self-assessment return. Principal Private Residence relief, retirement relief, entrepreneur relief (10% rate up to €1m lifetime) and indexation for pre-2003 acquisitions can reduce the bill significantly.

Casual Worker

A casual worker is an employee engaged on an as-required basis without a guaranteed minimum number of hours, typically used in hospitality, events, retail and care. Despite the irregular pattern, casuals in Ireland are normally engaged under a contract of service and benefit from the same statutory protections as other employees: minimum wage of €14.15 per hour for adults in 2026, paid annual leave at 8% of hours worked, public holiday entitlement after 40 hours in the previous five weeks, payslip entitlement, and PRSI Class A coverage. The Employment (Miscellaneous Provisions) Act 2018 strengthened casual rights with banded hours provisions, a minimum payment for unused on-call time, and a ban on most zero-hour contracts. Casuals are paid through PAYE, with an RPN issued by Revenue once the employer registers the employment.

Childcare Benefit

There is no specific tax-favoured "childcare benefit" line on Irish payslips equivalent to UK childcare vouchers, because the State runs the National Childcare Scheme (NCS) directly with providers rather than through employers. However, employer-provided childcare can attract a Benefit-in-Kind exemption where the employer wholly or substantially provides the childcare facilities on premises managed by the employer. Subsidies paid by employers towards external creches are taxable as BIK at the full cost. Working parents access State support via the NCS universal subsidy of up to €2.14 per hour and means-tested top-ups, applied for through the NCS portal not the payroll. Some employers operate salary-sacrifice creche fee arrangements; these have no tax advantage in Ireland and are simply a budgeting convenience.

Commission

Commission is variable pay calculated as a percentage of sales, fees or other transactions generated by the employee. It is fully assessable to PAYE, USC and PRSI in the period in which it is paid, regardless of when the underlying sale occurred. Commission is normally paid monthly or quarterly in arrears and may be subject to clawback under the contract of employment if the customer cancels, returns goods or fails to pay. For statutory holiday pay, the average of commission earned over the previous 13 weeks must be included in the holiday rate so that an employee on a low base salary is not penalised for taking leave. Commission-only arrangements are permissible only where the worker is a self-employed agent rather than an employee.

Contract for Services

A contract for services is an arrangement under which a self-employed contractor agrees to perform a specified task or deliver a defined output for a client. The contractor is in business on their own account, supplies their own tools, sets their own working pattern, can subcontract or substitute, and bears the financial risk of the work. They invoice the client, charge VAT where registered, and pay their own income tax, USC and PRSI Class S through self-assessment using Form 11. They receive no payslip, no annual leave, no statutory sick pay and no redundancy. Whether someone is genuinely engaged under a contract for services or is in fact an employee under a contract of service is determined by the substance of the relationship, applying the Karshan (Domino's Pizza) Supreme Court five-step test rather than the contract label.

Contract of Service

A contract of service is the legal relationship between an employer and an employee. The employee agrees to provide personal service in return for wages, the employer exercises control over how, when and where work is done, and the employee is integrated into the employer's organisation. A contract of service triggers full employment law protections: minimum wage, paid leave, working time limits, statutory sick pay, statutory notice, redundancy, unfair dismissal, parental leave and PRSI Class A coverage. The employer is responsible for operating PAYE, USC and PRSI through real-time payroll reporting. The Karshan (Domino's Pizza) Supreme Court decision and Revenue's Code of Practice on Determining Employment Status set out the five-step test that distinguishes employment from a contract for services.

Cycle to Work Scheme

The Cycle to Work Scheme allows an employer to provide a bicycle and safety equipment to an employee for use in commuting, with the cost recovered from the employee through salary sacrifice spread over up to 12 months, free of income tax, USC and PRSI. The scheme limits for 2026 are €1,250 for a standard bicycle, €1,500 for an electric bicycle (e-bike) and €3,000 for a cargo or e-cargo bicycle. An employee can avail of the scheme once every four years per limit. The bicycle must be used at least 50% for commuting between home and work. The employee's gross pay is reduced by the agreed deduction each pay period before tax is calculated, generating savings of up to 52% compared with buying a bike from net pay.

Deposit Interest Retention Tax

Also: DIRT

DIRT is a withholding tax deducted by Irish banks, credit unions and An Post at source from interest paid on deposit accounts, share dividend equivalents on credit union accounts and certain bonds. The rate for 2026 is 33%. DIRT is a final liability for most savers, meaning no further income tax is due, but interest is still subject to PRSI at 4.2% Class S where total non-PAYE income exceeds €5,000. People aged 65 or over with total income below the age exemption limits (€18,000 single, €36,000 married) can claim a refund of DIRT, and first-time buyers can reclaim DIRT on savings used towards a first home. DIRT does not appear on a payslip but is reported on the bank statement and on the EDS for those who file a Form 12 or Form 11.

Earned Income Credit

The Earned Income Credit is a non-refundable tax credit available to self-employed individuals (sole traders, proprietary directors who do not qualify for the Employee Tax Credit, and farmers) on their earned income from a trade, profession or proprietary directorship. For 2026 the credit is €2,000 per year, equalising it with the Employee/PAYE Tax Credit. The credit is capped at 20% of the qualifying earned income, so a person with earned income of only €5,000 would receive a credit of €1,000. Where an individual has both Schedule E PAYE income and Schedule D self-employed income, the combined Employee Tax Credit and Earned Income Credit cannot exceed €2,000. The credit is claimed on Form 11 self-assessment.

Employee Tax Credit

Also: PAYE Credit

The Employee Tax Credit, historically called the PAYE Credit, is a non-refundable tax credit of €2,000 in 2026 available to anyone in receipt of PAYE income from an employment or an occupational pension. It is granted in addition to the Personal Tax Credit, so a single PAYE worker has at least €4,000 of tax credits before any others, meaning the first €20,000 of income is effectively free of income tax (4,000 / 20%). Proprietary directors who own more than 15% of their employer company do not qualify for this credit and instead claim the Earned Income Credit. The credit is applied automatically by Revenue and reflected in the RPN issued to the employer. It cannot be claimed twice across multiple employments by the same individual.

Employer PRSI

Employer PRSI is the social insurance contribution that the employer must pay on top of an employee's gross pay. It does not reduce the employee's net pay but is a real cost of employment. For 2026 the lower employer PRSI rate is 8.9% on weekly earnings up to €527, and the higher rate is 11.15% on weekly earnings above that threshold. From October 2026 the higher rate is scheduled to rise to 11.25% as part of the phased increases announced in Budget 2026 to fund the long-term sustainability of the Social Insurance Fund. Employer PRSI funds the State Pension Contributory, Jobseeker's Benefit, Illness Benefit, Maternity Benefit, Paternity Benefit and the National Training Fund Levy of 1% included in the rate.

Employment Detail Summary

Also: EDS

The Employment Detail Summary is the annual statement of pay and statutory deductions that Revenue makes available to every PAYE worker in myAccount from January following the tax year. It replaced the paper P60 from 2019. The EDS shows total gross pay, taxable pay, USC pay, PRSI pay, income tax, USC and PRSI deducted by each employer or pension provider during the year, with weekly insurable contributions for PRSI. Employees use the EDS to file a Form 12 to claim additional reliefs (medical expenses, tuition fees, remote working relief, flat-rate expenses) or to identify under or overpayments. The EDS is built up automatically from the real-time payroll submissions every employer makes to Revenue and is fully reconciled in the P21 statement of liability.

Employment Wage Subsidy Scheme (Legacy)

Also: EWSS

The Employment Wage Subsidy Scheme replaced the Temporary Wage Subsidy Scheme on 1 September 2020 and ran until 31 May 2022. Under EWSS, qualifying employers received a flat subsidy per eligible employee per week (up to €350) and a reduced 0.5% rate of employer PRSI, while employees were paid in the normal way through PAYE without any direct visibility of the subsidy on their payslip. EWSS does not appear on any current 2026 payslip, but old EDSs and historic payroll records covering 2020 to 2022 will still reference it. Some legacy reconciliation cases continue, particularly where Revenue has identified employer overclaims, but these are between Revenue and the employer and have no payslip impact today.

Ex-Gratia Payment

An ex-gratia payment is a sum paid by an employer to an employee on termination of employment over and above any contractual entitlement, statutory redundancy or pay in lieu of notice. The first €10,160 of an ex-gratia termination payment is exempt from income tax and USC, with €765 added for each complete year of service. Where the standard exemption is insufficient, the Increased Exemption (a further €10,000, available once in every 10 years and reduced by any tax-free pension lump sum entitlement) or the Standard Capital Superannuation Benefit (SCSB), which is broadly average pay over the last 36 months times years of service divided by 15 less any tax-free pension lump sum, can be substituted. Ex-gratia payments are exempt from PRSI in full but USC applies to the taxable element.

Form 11

Form 11 is the annual income tax return for self-assessed taxpayers, including self-employed sole traders, partners, proprietary directors, landlords with significant rental income, and PAYE workers with non-PAYE income above €5,000. The 2025 Form 11 is due to be filed and any balancing tax paid by 31 October 2026 (extended to mid-November for those who both pay and file via Revenue Online Service). Preliminary tax for 2026 is paid alongside the 2025 return. Form 11 captures all income (Schedule E PAYE, Schedule D self-employment and rental, foreign income, investment income), all reliefs (pension AVCs, medical expenses, tuition fees), and computes income tax, USC, PRSI Class S and any CGT and CAT liabilities. Late filing triggers a 5% or 10% surcharge.

Form 12

Form 12 is the simplified income tax return used by PAYE workers with modest non-PAYE income (under €5,000 net of reliefs and €30,000 gross) and by employees claiming additional credits and reliefs that are not already in their RPN. It is filed online through myAccount and most PAYE workers complete it to claim medical expenses relief at 20%, non-routine dental relief, tuition fees relief, the Rent Tax Credit (€1,000 single, €2,000 jointly assessed for 2026), remote working relief, and to declare deposit interest, share dividends or small rental income. Filing a Form 12 generates a P21 Balancing Statement showing under or overpayment for the year. Returns can be filed for the four most recent tax years; filing a Form 12 for 2022 must be done before 31 December 2026.

Gross Pay

Gross pay is the total pay earned by an employee in a pay period before any statutory or voluntary deductions. It comprises basic pay plus all variable additions: overtime, shift premium, bonus, commission, public holiday pay, Sunday premium, allowances and notional pay (BIK). On an Irish payslip gross pay is the figure on which PAYE, USC and PRSI are calculated, although taxable pay, USC pay and PRSI pay can each differ slightly from gross pay because of pre-tax deductions. For example, an occupational pension contribution reduces taxable pay but not USC pay or PRSI pay, while a Cycle to Work salary sacrifice reduces gross pay for all three. Gross pay accumulates year-to-date and feeds into the EDS at year end.

Higher Rate of Income Tax

The higher rate of income tax in Ireland for 2026 is 40% and applies to taxable PAYE and Schedule D income above the Standard Rate Cut-Off Point. The SRCOP is €44,000 for a single person, €53,000 for a one-parent family, and up to €88,000 for a married couple or civil partners jointly assessed where each spouse has at least €35,000 of own income. The higher rate is also applied to ARF drawdowns above the SRCOP and to most non-PAYE income such as significant rental profits. Tax credits reduce the income tax bill calculated by combining the standard 20% and higher 40% rates rather than reducing the amount of income subject to the higher rate. Pension contributions within the age-related limits attract relief at the marginal rate, so a higher-rate taxpayer saves 40% income tax on every euro contributed.

Holiday Pay

Holiday pay is the wage paid to an employee in respect of statutory annual leave under the Organisation of Working Time Act 1997. It must reflect the employee's normal weekly rate, including regular overtime, shift premiums, the average of commission and bonus tied to performance over the previous 13 weeks, and rostered allowances. For an hourly-paid employee, holiday pay is calculated on the average hours worked over the 13 weeks before the leave starts. For a salaried employee, holiday pay is the same as a normal week's salary plus regular allowances. On termination, accrued but untaken statutory leave must be paid in full as cash. Holiday pay is fully subject to PAYE, USC and PRSI in the period of payment.

Home Carer Tax Credit

The Home Carer Tax Credit is available to married couples and civil partners who are jointly assessed where one spouse stays at home to care for a dependent person (a child for whom child benefit is payable, a person aged 65 or over, or a person with a disability). For 2026 the credit is €1,950. The home carer's own income must not exceed €7,200 for the full credit, with a tapered reduction (the credit is reduced by half of the excess income) up to €11,100 at which point the credit is fully extinguished. A couple cannot claim both the Home Carer Credit and the increased SRCOP for two-earner couples; they choose whichever is more beneficial. The credit is claimed in myAccount and applied through the RPN.

Incapacitated Child Tax Credit

The Incapacitated Child Tax Credit is granted to a parent or guardian who maintains a child who is permanently incapacitated, either physically or mentally, from maintaining themselves and the incapacity arose before the child reached 21, or while the child was in full-time education. For 2026 the credit is €3,800 per qualifying child. The credit is in addition to any other credit the taxpayer is entitled to and can be claimed by either parent if both contribute to maintenance, or apportioned between them. Form ICC1 is used to make a first claim, supported by a doctor's certificate. The Single Person Child Carer Credit and the Incapacitated Child Credit can both apply to the same family in respect of different children.

JobSeeker Contributions

JobSeeker contributions are the PRSI credits a worker accumulates that count towards entitlement to JobSeeker's Benefit when unemployed. To qualify for JobSeeker's Benefit (JBP) in 2026, the worker must have at least 104 weeks of paid Class A, H or P contributions since first starting work, plus 39 weeks paid or credited in the Governing Contribution Year (the second-last complete tax year before the year of claim) of which at least 13 must be paid in that year, or 26 paid in each of the GCY and the year before. The maximum personal rate of JobSeeker's Benefit for 2026 is €244 per week. Contributions while on Illness Benefit, Maternity Benefit and Jobseeker's Benefit are typically credited so the contribution record continues during qualifying absences.

Junior Minimum Wage Rate

The junior or sub-adult minimum wage rates apply to workers under 20 years of age. For 2026, against the adult rate of €14.15 per hour, the rates are: under 18 - 70% of the adult rate (€9.91 per hour); aged 18 - 80% of the adult rate (€11.32 per hour); aged 19 - 90% of the adult rate (€12.74 per hour). From the worker's 20th birthday, the full adult rate applies. These rates are set under the National Minimum Wage Act 2000 as amended and are reviewed each year by the Low Pay Commission. The rates are gross floor amounts; an employer can pay more but cannot pay less. Board and lodgings can be reckoned at fixed amounts within the minimum wage calculation but not above the statutory caps.

Living Wage (Ireland)

The Living Wage is a non-statutory hourly rate calculated annually by the Living Wage Technical Group and based on the cost of a socially acceptable basic standard of living. For 2026 the Living Wage is approximately €14.80 per hour, sitting above the statutory National Minimum Wage of €14.15. The Government has committed to a "national living wage" set at 60% of median hourly earnings, with the minimum wage increases of recent years intended to reach that target by January 2026, after which the minimum wage and the living wage targets will track median earnings rather than basket-of-goods costs. The Living Wage is voluntarily adopted by accredited Living Wage Employers and has no automatic legal effect for non-accredited employers.

Married Person or Civil Partner Tax Credit

The Married Person or Civil Partner Tax Credit is the personal tax credit allocated to a couple jointly assessed for income tax. For 2026 it is €4,000, double the single person's €2,000. Joint assessment is the default election for married couples and civil partners and is usually the most tax-efficient because tax credits and the SRCOP can be allocated to whichever spouse generates the higher tax liability, subject to a maximum SRCOP of €88,000 for a couple where both have at least €35,000 of own earnings. Couples can elect for separate assessment or single assessment instead. The Year of Marriage relief allows a partial reclaim for the first year if joint assessment would have been more beneficial than the single assessment that applied in the marriage year.

Maternity Benefit Top-Up

Maternity Benefit is paid by the Department of Social Protection at €289 per week (2026 rate) for 26 weeks. Many employers contractually top up Maternity Benefit to the employee's normal salary for some or all of the maternity leave period. The top-up is treated in one of two ways for payroll: the employer pays full salary and the employee assigns the Maternity Benefit to the employer, or the employer pays only the difference between Maternity Benefit and full salary. Either way, only the employer-paid element is subject to PAYE and USC. From 2025 Maternity Benefit itself is liable to income tax but not USC or PRSI, with Revenue collecting the tax by reducing the employee's tax credits and SRCOP through the RPN.

My Future Fund

My Future Fund is the public-facing brand for Ireland's new automatic enrolment retirement savings system, which began phased implementation in 2026 administered by NAERSA. It applies to employees aged between 23 and 60 earning more than €20,000 a year who are not already in a workplace pension. In year one employees contribute 1.5% of gross pay, employers match 1.5% and the State adds 0.5% (representing a 33% top-up of the employee contribution rather than tax relief through PAYE). Contributions step up every three years to reach 6% employee, 6% employer, 2% State by year ten. Funds are pooled and invested in age-appropriate default lifecycle strategies. Employees can opt out only after 6 months and are auto-re-enrolled every 2 years. My Future Fund sits alongside, not on top of, an existing occupational pension or PRSA.

National Minimum Wage

The National Minimum Wage is the statutory hourly floor for employees aged 20 or over, set under the National Minimum Wage Act 2000. From 1 January 2026 the rate is €14.15 per hour, an 80 cent increase on the 2025 rate of €13.50. It applies to almost all employees, including casuals and agency workers, but excludes the employee's close family members in a family business and employees in formal apprenticeships. Lower sub-minimum rates apply to under-20s. Pay for minimum wage purposes includes basic pay, shift premium and incentive pay, but excludes overtime, on-call payments, expenses and most allowances. Employees who believe they have been underpaid can complain to the Workplace Relations Commission and recover up to six years' arrears.

Night Work

Night work in Ireland is governed by the Organisation of Working Time Act 1997. A night worker is someone who normally works at least three hours between midnight and 7am or who works at least half their annual hours during that period. Night workers cannot ordinarily work more than 8 hours in 24 hours where the work involves special hazards or heavy physical or mental strain, or 48 hours per week averaged over two months. Employers must offer free health assessments before starting night work and at regular intervals thereafter. There is no statutory premium for night work in Ireland, but most collective agreements and many contracts of employment provide a night-shift premium of 15% to 33% above the daytime rate.

Notice Pay

Notice pay is the wage paid to an employee during a notice period, whether worked or paid in lieu. Statutory minimum notice under the Minimum Notice and Terms of Employment Act 1973 ranges from 1 week (13 weeks to 2 years' service) to 8 weeks (15+ years' service). Contractual notice is often longer. If the employee works the notice period, normal pay is delivered each pay period and is fully taxable through PAYE, USC and PRSI. If the employer pays in lieu of notice, the payment is contractual PILON and fully taxable. Garden leave (employee at home, still employed and paid) is taxed identically to working notice. Notice pay is distinct from ex-gratia or redundancy and does not benefit from the €10,160 termination exemption.

Notice Period (Ireland)

A notice period is the time between giving notice of termination and the actual end of employment. The Minimum Notice and Terms of Employment Act 1973 sets the statutory minimum the employer must give: 1 week for 13 weeks to 2 years' service, 2 weeks for 2 to 5 years, 4 weeks for 5 to 10 years, 6 weeks for 10 to 15 years, and 8 weeks for over 15 years. Employees must give at least 1 week's notice once they have 13 weeks' service. Most contracts provide for longer notice, particularly for senior or specialist roles. During the notice period the contract continues and the employee accrues annual leave, public holidays and PRSI Class A contributions in the usual way. The employer can elect to pay in lieu of notice instead of requiring the employee to attend.

Notional Pay

Notional pay is the cash equivalent value of a Benefit-in-Kind that is added to gross pay so that PAYE, USC and PRSI are deducted from the employee's actual cash wages on the higher combined figure. No actual money changes hands for the notional pay itself; the line simply tells Revenue and the employee how much non-cash value has been provided. Common sources of notional pay are the company car BIK (CO2-banded percentage of original market value), employer-paid health insurance, employer-provided accommodation and preferential staff loans. Notional pay reduces the employee's net cash and slightly increases the employer's PRSI liability. It is reported in real time through PAYE Modernisation and shown clearly on the payslip with a corresponding "Notional Pay Adjustment" deduction so that net pay is unaffected by the notional credit itself.

Occupational Pension

An occupational pension is a pension scheme set up by an employer for the benefit of its employees, typically as a defined benefit (DB) or defined contribution (DC) trust. Employee contributions are deducted from gross pay before income tax (full marginal-rate relief) but not before USC or PRSI. Employer contributions are not a Benefit-in-Kind. The age-related percentage limits cap the amount of relievable employee contributions: 15% (under 30), 20% (30 to 39), 25% (40 to 49), 30% (50 to 54), 35% (55 to 59), 40% (60 and over), applied to a maximum earnings figure of €115,000 for 2026. At retirement up to 25% can be taken as a tax-free lump sum subject to a lifetime cap of €200,000 (next €300,000 taxed at 20%, balance at 40%).

Overtime

Overtime is pay for hours worked over and above the contractual standard week. There is no statutory entitlement to a higher rate for overtime in Ireland, although the Working Time Act caps average weekly hours at 48 over a 4-month reference period and most agreements provide a premium of time-and-a-quarter, time-and-a-half or double time depending on the day and hour. Overtime is fully assessable to PAYE, USC and PRSI in the period earned. It does not form part of basic pay for statutory redundancy calculation but is included in holiday pay and public holiday pay where it is a regular feature of the employee's working pattern. Overtime hours and the corresponding premium portion are usually shown separately on the payslip.

P21 Balancing Statement

A P21, properly the Statement of Liability, is the year-end reconciliation Revenue issues confirming the total income, allowable reliefs, total income tax, USC and PRSI liability for the year and any underpayment or refund. It is generated automatically when a PAYE worker submits a Form 12 in myAccount or when a self-assessed taxpayer files a Form 11. From 2019 onwards employees can request a Statement of Liability for any of the four most recent tax years; the 2022 P21 must be requested before 31 December 2026. Refunds are paid by EFT to the bank account on file. Underpayments below €6,000 are typically collected by reducing future tax credits over 12 months rather than demanded as a lump sum. The P21 shows the EDS data plus all reliefs claimed.

Pay As You Earn

Also: PAYE

PAYE is the system by which Irish employers and pension providers deduct income tax from employees' wages and pensions in real time and remit it to Revenue. Each pay period the employer applies the cumulative tax credits and Standard Rate Cut-Off Point allocated by Revenue in the latest RPN for that employee, calculates 20% on income up to the cumulative SRCOP and 40% on the excess, deducts cumulative tax credits, and arrives at a year-to-date tax figure. The difference between cumulative tax due and cumulative tax already deducted is the PAYE amount for the current period. PAYE Modernisation (real time reporting) means the employer reports each payment to Revenue on or before the pay date, ensuring myAccount records and EDSs are always up to date.

Pay in Lieu of Notice

Also: PILON

Pay in lieu of notice is a payment made by an employer to an employee to terminate the contract without working out the notice period. PILON is contractual where the employment contract permits the employer to elect for it; otherwise it is technically a damages payment. Either way, Revenue's settled position is that PILON is fully taxable as Schedule E pay, with PAYE, USC and PRSI deducted in the pay period of payment. PILON does not benefit from the €10,160 ex-gratia exemption because it is consideration for work the employee would otherwise have done. PILON can push monthly pay above the SRCOP, generating significant 40% tax in the final period; cumulative basis means any genuine overdeduction is corrected on the EDS or via a P21.

Pay Related Social Insurance

Also: PRSI

PRSI is the social insurance contribution paid by employees, the self-employed and most employers to fund the Social Insurance Fund, which in turn pays the State Pension Contributory, Jobseeker's Benefit, Illness Benefit, Maternity, Paternity and Parents' Benefit, Treatment Benefit and other contributory entitlements. Employees are placed in PRSI classes by reference to their employment type. Class A is by far the most common. For 2026 the employee Class A1 rate is 4.2% on all reckonable pay (up from 4.1% in 2025), with no upper earnings ceiling. There is a small earnings disregard (PRSI Credit) on weekly earnings between €352 and €424 that tapers the effective rate. Employers pay 8.9% or 11.15% on top.

Pension Age-Related Limit

The age-related limit is the maximum percentage of earnings on which an individual can claim tax relief for personal pension contributions in a given year. For 2026 the limits are: under 30 - 15%; 30 to 39 - 20%; 40 to 49 - 25%; 50 to 54 - 30%; 55 to 59 - 35%; 60 and over - 40%. These percentages are applied to the employee's relevant earnings, capped at €115,000. So a 45-year-old earning €100,000 can contribute €25,000 with full marginal-rate income tax relief; the same person earning €150,000 is capped at €115,000 x 25% = €28,750. Employer contributions are not counted against these limits. Contributions exceeding the limit can normally be carried forward for relief in a future year, subject to the cap.

Pension Earnings Cap

The pension earnings cap, or "earnings limit", is the maximum amount of relevant earnings to which the age-related percentage limit can be applied in computing tax relief for personal pension contributions. For 2026 the cap is €115,000 per individual per tax year. It applies across all sources of relevant earnings combined. The cap was introduced in 2006 and last amended in 2011. A 60-year-old with €200,000 of earnings cannot contribute €80,000 with full relief; relief is limited to 40% of €115,000 = €46,000. The cap does not limit employer contributions to occupational schemes. The Standard Fund Threshold (€2 million for 2026, rising in stages from 2026 to €2.8 million by 2029) caps the total tax-relieved fund at retirement.

Personal Public Service Number

Also: PPSN

The PPSN is a unique identifier for individuals in their dealings with public services in Ireland, including Revenue, the Department of Social Protection, the HSE and education. A PPSN is mandatory before an employer can register a new employee with Revenue and request an RPN. Children born in Ireland are issued a PPSN automatically; adults arriving in Ireland apply through MyWelfare with proof of identity, address and reason for needing the number (such as a written job offer). The PPSN consists of seven digits, a check letter and sometimes a second character. It is shown on every payslip, EDS, tax credit certificate and welfare letter. Employers must protect the PPSN as personal data under GDPR.

Personal Retirement Savings Account

Also: PRSA

A PRSA is a portable personal pension contract introduced by the Pensions Authority that any individual can open with an authorised PRSA provider. Employee contributions attract income tax relief at the marginal rate (20% or 40%) up to the age-related percentage limits applied to the €115,000 earnings cap in 2026. Critically, since Finance Act 2022 employer contributions to a PRSA are not capped by reference to the employee's salary or age and are not a Benefit-in-Kind, making the PRSA an extremely attractive vehicle for owner-managers and high earners. Standard PRSAs have charge caps (5% on contributions, 1% on funds) while Non-Standard PRSAs allow wider investment choice without the caps. AVC PRSAs sit alongside an occupational pension to allow members to top up benefits.

Personal Tax Credit

The Personal Tax Credit is the basic non-refundable tax credit available to every individual taxpayer resident in Ireland. For 2026 it is €2,000 for a single, separated, divorced, surviving civil partner or widowed person and €4,000 for a married couple or civil partners jointly assessed. The Personal Tax Credit is automatically reflected in the RPN issued to the employer or pension provider, so it is applied through PAYE without any claim being needed. A PAYE worker also receives the Employee Tax Credit of €2,000, giving combined tax credits of at least €4,000, sufficient to cover the income tax on the first €20,000 of earnings (€20,000 x 20% = €4,000). The credit cannot be claimed twice if the individual has more than one employment in the year.

Probation Period (Ireland)

A probation period is an initial trial phase at the start of employment during which performance is assessed and the contract can be terminated more easily. Under the European Union (Transparent and Predictable Working Conditions) Regulations 2022, the probation period is generally limited to 6 months, extendable on objective grounds in exceptional cases to a maximum of 12 months. During probation, statutory minimum notice still applies once the employee has 13 weeks' service, and the Unfair Dismissals Acts apply only after 12 months' continuous service except where dismissal is for a protected reason such as trade union activity, pregnancy or whistleblowing. Probationers are entitled to the same minimum wage, paid leave, public holidays, payslip and PRSI Class A contributions as confirmed staff.

PRSI Class A0

Class A0 covers employees in industrial, commercial and service-type employment, including civil servants recruited from April 1995, with weekly earnings of €38 to €352. Employees in this band pay no employee PRSI but receive a full reckonable contribution towards their social insurance record, meaning the week counts towards qualifying conditions for the State Pension Contributory and other benefits. The employer pays 8.9% on the same earnings. Class A0 is mostly seen in the payslips of part-time workers and students whose weekly hours produce earnings just above the floor for compulsory PRSI. Once weekly earnings exceed €352, the employee moves into Class AX or A1 and pays 4.2% (2026 rate).

PRSI Class A1

Class A1 is the standard PRSI class for employed earners with weekly earnings of more than €424. It covers most private sector employees and civil servants recruited from 1995 onwards. For 2026 the employee rate is 4.2% on all reckonable pay (rising to 4.25% from October as part of the multi-year increase plan). The employer rate is 8.9% on weekly earnings up to €527 and 11.15% above that threshold. Class A1 secures full coverage for the State Pension Contributory, Jobseeker's Benefit, Illness Benefit, Invalidity Pension, Maternity Benefit and other key benefits. There is no upper earnings ceiling: the 4.2% applies even on €1m of earnings, although USC at 8% above €70,044 effectively means high earners pay a combined marginal rate around 52.2%.

PRSI Class AL

Class AL covers employees with weekly earnings between €352.01 and €424 who would otherwise pay full Class A1 PRSI but qualify for the PRSI Credit. The PRSI Credit reduces the employee's 4.2% (2026 rate) liability by up to €12 per week, tapering as weekly earnings rise so that the credit fully phases out at €424. Class AL is therefore a transitional class for moderate-earning part-time workers ensuring they do not face a sharp drop in net pay as their earnings cross the PRSI threshold. The employer still pays 8.9% on the gross earnings. The employee's contribution week counts in full for benefit qualification purposes despite the reduced cash deduction.

PRSI Class AX

Class AX is the PRSI class for employees with weekly earnings between €352.01 and €424 inclusive when the PRSI Credit fully eliminates their liability or where the modulated subclass code is used by the payroll software. In practice, with the 2026 employee rate at 4.2%, AX and AL are sometimes used interchangeably by payroll providers. The employer pays 8.9% on the gross earnings. The contribution week counts in full toward the employee's social insurance record, meaning entitlement to the State Pension Contributory and other benefits accrues. As earnings rise above €424, the employee moves into Class A1 and the PRSI Credit phases out completely.

PRSI Class B

Class B applies to permanent and pensionable civil servants, registered doctors, dentists and Garda recruited before 6 April 1995. Class B contributors pay a modified PRSI rate (typically 0.9% on weekly earnings up to €1,443 and 4% above, with the lower rate at 4% on the balance for 2026), reflecting their entitlement to the more generous pre-1995 public service pension and limited social insurance benefits. Class B contributors are covered for Widow's, Widower's and Surviving Civil Partner's Pension, Guardian's Payment and Carer's Benefit but are not covered for the State Pension Contributory (their occupational pension fills that role). Employer Class B PRSI is also at modified rates (around 2.01% on the lower band).

PRSI Class D

Class D applies to permanent and pensionable employees of the Houses of the Oireachtas, the Office of the President, certain semi-state bodies and similar pre-1995 public service employees who are not in Class B or C. Class D contributors pay a modified PRSI rate (typically 0.9% on weekly earnings up to €1,443 and 4% above for 2026) reflecting reduced social insurance benefit entitlement. They are covered for Widow's, Widower's and Surviving Civil Partner's Pension, Guardian's Payment and Occupational Injuries Benefit but not the State Pension Contributory, Jobseeker's Benefit or Illness Benefit. Their employer pays 2.35% PRSI (modified rate). Class D contributors typically have a defined benefit public service pension that compensates for the reduced social insurance cover.

PRSI Class K

Class K applies to public office holders (judges, the President, members of the Oireachtas and the European Parliament where Class K applies, the Attorney General and the DPP) and to certain unearned income such as occupational pensions where the recipient is under State Pension age. The Class K rate for 2026 is 4.2% (the same as Class A1) but the contributor receives no social insurance benefit entitlement from these contributions, hence the colloquial name "the no-benefit class". The contribution funds the Social Insurance Fund. Employees who turn 66 typically transition out of Class K to Class M, which is a zero-rate class for those who have reached State Pension age.

PRSI Class M

Class M is the PRSI class for individuals who have no liability to PRSI: those aged 66 or over (above State Pension age), people with no reckonable income, employees on Maternity Benefit, and certain office holders. The class code records that the person is in pensionable insurable employment for record-keeping purposes but no PRSI is deducted from their pay or pension. Employers also pay no PRSI on Class M employees. From 1 January 2024, those who reach 66 can opt to defer the State Pension Contributory and continue working with full PRSI liability under Class J or Class A as appropriate up to age 70 to enhance their final pension entitlement; doing so takes them out of Class M.

PRSI Class P

Class P is the PRSI class for share fishermen and share fisherwomen who are classed as self-employed under Class S but who have opted for additional Class P coverage. Class P contributors pay an extra 4% PRSI on their share of catch earnings (so 4% on top of the Class S 4.2% for 2026, totalling 8.2%) which provides additional entitlement to limited Jobseeker's Benefit, limited Illness Benefit and Treatment Benefit. The contribution is capped at €200 per year. Class P is uncommon outside the fishing fleet and is administered through self-assessment rather than payroll PAYE. It exists to give a category of irregular earners access to short-term contributory benefits that pure Class S would not provide.

PRSI Class S

Class S is the PRSI class for self-employed individuals: sole traders, partners, proprietary directors with more than 50% control, share fishers, professional contractors and farmers. The 2026 employee rate is 4.2% on all reckonable income (the same as Class A1) with a minimum annual contribution of €650. Class S secures coverage for the State Pension Contributory, Maternity Benefit, Adoptive Benefit, Paternity Benefit, Parents' Benefit, Widow's, Widower's and Surviving Civil Partner's Contributory Pension, Treatment Benefit, Invalidity Pension and Jobseeker's Benefit (Self-Employed). Class S is not covered for short-term Illness Benefit beyond Enhanced Illness Benefit nor Occupational Injuries Benefit. Class S is paid through Form 11 self-assessment, not PAYE.

PRSI Credit

The PRSI Credit is a tapered relief that reduces the employee PRSI bill on modest weekly earnings, smoothing the entry into full Class A1 PRSI. For 2026, where the employee's weekly earnings are between €352.01 and €424, a maximum PRSI Credit of €12 per week is applied to reduce the 4.2% PRSI liability, with the credit reducing by one-sixth of the difference between actual weekly earnings and €352.01. So at €352.01 the credit is €12 (PRSI almost zero), at €388 the credit is €6, and at €424 the credit is zero. The credit applies only in Class AL and AX subclasses, never in Class A1 proper. The contribution week still counts in full towards benefit eligibility despite the smaller cash deduction.

PRSI Weekly Threshold

The PRSI weekly threshold is the floor below which an employee pays no PRSI and an employer pays no employer PRSI. For 2026 the floor is €38 per week of reckonable earnings. Below €38 the employment is regarded as exempt and the week does not count for benefit purposes. Between €38 and €352, the employee pays no PRSI but the employer pays 8.9%, and the contribution week counts (Class A0). Between €352.01 and €424, the employee pays the rate of 4.2% reduced by the PRSI Credit (Class AL/AX). Above €424 weekly the employee pays the full 4.2% on all earnings with no credit (Class A1). For employer PRSI a separate threshold of €527 separates the 8.9% lower band from the 11.15% higher band.

Public Holiday Pay

When a public holiday falls during employment, the Organisation of Working Time Act 1997 entitles every full-time employee, and any part-time employee who has worked at least 40 hours in the preceding five weeks, to one of: a paid day off on the day, a paid day off within the month, an extra day of annual leave, or an additional day's pay. The choice is the employer's but must be communicated 14 days in advance. For an employee normally rostered to work the public holiday, the entitlement is double the day's pay (the worked day plus the public holiday benefit). The 2026 public holidays are New Year's Day, St Brigid's Day, St Patrick's Day, Easter Monday, the first Mondays of May, June and August, the last Monday of October, Christmas Day and St Stephen's Day.

Public Holidays (Ireland)

Ireland has 10 public holidays a year following the addition of St Brigid's Day on the first Monday in February (or 1 February if it falls on a Friday) from 2023. The full list is New Year's Day, St Brigid's Day, St Patrick's Day (17 March), Easter Monday, May bank holiday (first Monday in May), June bank holiday (first Monday in June), August bank holiday (first Monday in August), October bank holiday (last Monday in October), Christmas Day and St Stephen's Day. Good Friday is not a public holiday although many employers close. Public holiday entitlement is governed by the Organisation of Working Time Act 1997 and is separate from and in addition to the statutory annual leave entitlement of 4 weeks.

Public Service Pension

The Public Service Superannuation arrangements provide defined benefit pensions to permanent and pensionable employees of central and local government, the HSE and the wider public service. Pre-2013 entrants accrue a pension at 1/80th of final salary per year of service plus a tax-free lump sum of 3/80ths per year, integrated with the State Pension. Post-2013 new entrants are in the Single Public Service Pension Scheme, accruing pension on career-average earnings. Employees pay a Public Service Pension Contribution comprising the basic contribution (1.5% to 6.5% depending on scheme) plus the Additional Superannuation Contribution (ASC) on earnings above thresholds. The combined contribution can exceed 10% of gross pay for senior staff but provides a generous, secure retirement income.

Redundancy (Ireland)

Redundancy in Ireland arises where an employer terminates an employee's contract because the role no longer exists, the workplace closes, the employer's requirements for that work have diminished or because of a lawful reorganisation. Statutory redundancy under the Redundancy Payments Acts 1967 to 2014 entitles employees with at least 2 years' continuous service to two weeks' pay per year of service plus one bonus week, capped at €600 per week (€31,200 a year for the calculation), tax-free. The procedure requires fair selection, consultation, written notice (at least the statutory minimum), and Form RP50 issued at termination. Collective redundancies (5+ in 21 days, scaled by workforce size) trigger a 30-day consultation period and notification to the Minister for Enterprise.

Redundancy Pay

Statutory redundancy pay is two weeks' gross pay for each year of continuous service plus one bonus week, with weekly pay capped at €600 (€31,200 annually) for the calculation. The full statutory amount is exempt from income tax, USC and PRSI. Many employers pay enhanced or "ex-gratia" redundancy on top, which qualifies for additional tax-free treatment under the basic exemption (€10,160 plus €765 per year of service), the increased exemption (€10,000 more, once in 10 years), or the SCSB formula, whichever is greater. Redundancy pay does not affect Jobseeker's Benefit entitlement and the contribution week immediately following termination is normally credited towards the PRSI record. Form RP50 is the employer's certificate confirming the redundancy.

Revenue myAccount

myAccount is Revenue's online portal for individual taxpayers, accessed at revenue.ie. PAYE workers can view and amend their tax credits and SRCOP allocation, see real-time payslip data submitted by their employer, request a Statement of Liability, file a Form 12, claim Rent Tax Credit, medical expenses relief, tuition fees relief and remote working relief, manage Local Property Tax, and update their bank account for refunds. myAccount uses the MyGovID identity service for two-factor authentication. Self-assessed taxpayers use ROS (Revenue Online Service) instead. Most reliefs and credits can be claimed instantly through myAccount with refunds typically paid within five working days, making it the primary self-service tool for Irish PAYE workers.

Revenue Payroll Notification

Also: RPN

The RPN is the electronic instruction Revenue sends to an employer for each employee, telling the employer the tax credits, SRCOP, USC bands and exemption indicators to apply for that pay period. The employer's payroll software requests the latest RPN for every employee at the start of each pay run. RPNs are issued from 1 December for the following tax year, refreshed automatically when the employee changes credits in myAccount, marries, retires, takes on a second job or notifies new circumstances. If no RPN is available the employer must apply emergency tax (week 4 emergency basis), which means no tax credits, the standard rate up to the weekly SRCOP for the first 4 weeks then full 40% taxation thereafter until an RPN is received.

Salary Sacrifice Pension

A salary sacrifice pension arrangement involves the employee giving up part of their gross salary in exchange for an equivalent employer pension contribution. In Ireland, Revenue has historically been hostile to salary sacrifice and treats most arrangements as taxable on the original salary. However, since the Finance Act 2022 changes for PRSAs, an employer can pay any amount into a PRSA on behalf of an employee with no BIK, effectively achieving a salary sacrifice outcome by reducing the employee's gross salary and paying the saving into the PRSA. Bonus sacrifice into a pension is more readily accepted by Revenue where elected before the bonus is earned. True salary sacrifice gives both income tax (40%/20%), USC (4%/8%) and PRSI (4.2%) savings, in contrast with regular employee pension contributions which save only income tax.

Shift Premium

A shift premium is an enhanced rate of pay for hours worked outside normal daytime hours, typically nights, evenings, weekends or unsocial shifts, as set out in the contract or collective agreement. There is no statutory shift premium in Ireland; the entitlement is purely contractual. Common rates are 15% to 33% above the basic hourly rate for evening or night shifts, with higher premiums for weekend or rotating-shift patterns. Shift premium is fully assessable to PAYE, USC and PRSI in the period earned and is included in the calculation of holiday pay where it forms part of the regular pattern of earnings. On payslips it is usually shown as a separate line so the employee can see the breakdown of basic pay versus the premium element.

Single Person Child Carer Credit

Also: SPCCC

The Single Person Child Carer Credit replaced the older one-parent family credit and is available to a single parent, separated parent or guardian who lives with the qualifying child or children for the greater part of the tax year. For 2026 the credit is €1,900. Only the primary claimant receives the credit by default, although they can choose to relinquish it to a secondary claimant who has the child for at least 100 days a year. The recipient of the SPCCC also gets an extended SRCOP of €53,000 (single + €9,000) before hitting the 40% rate. The credit is lost on cohabitation with a partner. It is claimed initially by Form SPCC1 in myAccount and applied through the RPN.

Single Public Service Pension Scheme

Also: Single Scheme

The Single Public Service Pension Scheme is the pension scheme for all new entrants to the Irish public service from 1 January 2013, replacing the various pre-existing public service schemes for new joiners. It is a career-average defined benefit scheme: each year of service generates pension and lump sum amounts referenced to that year's pensionable pay, indexed to CPI. Pension and lump sum thresholds accrue at 0.58% of pensionable pay up to 3.74 times the State Pension Contributory rate, plus 1.25% above that, with separate lump sum accrual. Normal Retirement Age is the State Pension Age (currently 66). Employees pay the standard scheme contribution plus the Additional Superannuation Contribution (ASC). Members can also fund AVCs to top up benefits.

Small Benefit Exemption

The Small Benefit Exemption allows an employer to give an employee non-cash benefits up to a total of €1,500 per year free from income tax, USC and PRSI from 2026, increased from €1,000 in 2025. The benefit must take the form of a voucher or tangible item, not cash or anything convertible to cash. The €1,500 can be split across up to five separate awards in the year. Common uses include a Christmas voucher, a wedding gift, a long-service award and a milestone birthday voucher. If any single award exceeds the cumulative limit, the entire excess is taxable as BIK in the period awarded. Employers must report all small benefits in real time through PAYE Modernisation, even though no tax is deducted, so Revenue can monitor the cumulative annual cap.

Standard Rate Cut-Off Point

Also: SRCOP

The Standard Rate Cut-Off Point is the amount of taxable income on which an individual pays the 20% standard rate of income tax; income above the SRCOP is taxed at 40%. For 2026 the SRCOP is €44,000 for a single person, €48,000 for a single person aged 65+, €53,000 for a single person with a qualifying child claiming the SPCCC, €53,000 for a married couple or civil partners with one earner, and up to €88,000 for a couple where both earn at least €35,000 (own income limit applies to the second-earner band of €35,000). The SRCOP is allocated by Revenue in the RPN and divided pro rata across pay periods on a cumulative basis. It is independent of USC bands and PRSI thresholds.

Standard Rate of Income Tax

The standard rate of income tax in Ireland for 2026 is 20% and applies to taxable income up to the Standard Rate Cut-Off Point. The 20% rate is also applied to certain reliefs (medical expenses, tuition fees, refundable rent tax credit) regardless of the taxpayer's marginal rate. Tax credits reduce the income tax bill calculated by combining the 20% standard and 40% higher rate, rather than reducing the amount of income subject to the 20% rate. Most PAYE workers earning under €44,000 (single) or €88,000 (jointly assessed couple, both earning) pay only the 20% rate. The standard rate has applied at 20% since 2002 with the SRCOP adjusted upwards each Budget to reflect inflation and policy choices.

Statutory Sick Pay

Also: SSP

Statutory Sick Pay was introduced by the Sick Leave Act 2022 and is being phased in. From 2026 employees with at least 13 weeks' continuous service are entitled to 7 days of paid sick leave per calendar year (originally planned to rise to 10 days but the increase to 7 days from 5 was paused at Budget 2025). SSP is paid at 70% of normal daily wages, capped at €110 per day. The employee must produce a medical certificate from a registered medical practitioner from day one of absence. SSP is fully subject to PAYE, USC and PRSI. After exhausting SSP, employees may claim Illness Benefit from the Department of Social Protection (€244 per week in 2026) subject to PRSI contribution conditions.

Stay and Spend (Legacy)

The Stay and Spend Tax Credit was a temporary measure introduced by the July Stimulus 2020 to support the hospitality sector during Covid restrictions. It allowed taxpayers to claim a credit of up to €125 (€250 jointly assessed) for qualifying expenditure on accommodation and food in registered Irish hospitality businesses between 1 October 2020 and 30 April 2021. The relief was claimed via myAccount with receipts uploaded as proof. Stay and Spend has not been available for several years and does not appear on any 2026 payslip or tax return. It is mentioned in the glossary because older P21s and historic Form 12 filings will reference it. There is no successor scheme; current hospitality support runs through reduced VAT rates rather than an income tax credit.

Sub-Minimum Wage Rates

Sub-minimum wage rates are the legally permitted reduced rates payable to employees under 20 years of age, set as percentages of the National Minimum Wage. For 2026, with the adult rate at €14.15 per hour, the sub-minimum rates are: aged under 18 - 70% (€9.91); aged 18 - 80% (€11.32); aged 19 - 90% (€12.74). The Low Pay Commission has recommended phasing out sub-minimum rates in favour of a single adult rate from age 18, but this had not been enacted as of January 2026. Sub-minimum rates apply automatically based on age regardless of competence or experience. From the worker's 20th birthday, the full adult rate applies. Apprentices are not on sub-minimum rates and their pay is governed by their apprenticeship contract.

Sunday Premium

A Sunday premium is an enhanced rate of pay for hours worked on a Sunday, required by section 14 of the Organisation of Working Time Act 1997 unless the contract already takes account of the requirement to work on Sundays. There is no fixed statutory percentage; the Workplace Relations Commission and Labour Court have generally accepted time-and-a-third (133%) as a reasonable Sunday premium where no other compensation has been built into the basic rate. Many employers pay double time. The premium is fully assessable to PAYE, USC and PRSI in the period earned. Where Sunday work is regular it is included in the calculation of holiday pay so that an employee taking annual leave in a week containing a rostered Sunday is paid the full enhanced amount.

Sunday Work

Sunday work in Ireland is treated as a special category under the Organisation of Working Time Act 1997. An employee who is required to work on a Sunday is entitled to compensation for the fact of Sunday working, either through an enhanced premium rate, time off in lieu, an allowance or a higher base rate that already builds in the Sunday element. The exact form of compensation is a matter for agreement, with the WRC and Labour Court having held that around 33% extra is the going rate where no other arrangement applies. Sunday work is otherwise treated like any other working day for purposes of working time, breaks, holiday accrual and minimum wage. Employees cannot be required to work on Sundays in a manner that breaches their working time limits.

Tax Credits

Tax credits are non-refundable amounts that reduce the income tax an individual must pay. Tax is computed on taxable income at 20% up to the SRCOP and 40% above, and tax credits are then deducted from the gross tax to arrive at the net tax due. For a 2026 single PAYE worker the standard credits are the Personal Tax Credit (€2,000) and the Employee Tax Credit (€2,000), giving €4,000 of credits, sufficient to remove tax on the first €20,000 of earnings (€20,000 x 20% = €4,000). Other credits include the Married Person Credit, SPCCC, Home Carer Credit, Age Tax Credit, Incapacitated Child Credit, Tuition Fees Credit and the Rent Tax Credit. Credits are allocated by Revenue in the RPN and applied automatically through PAYE.

Tax Relief at Source

Also: TRS

Tax Relief at Source is the mechanism by which certain tax reliefs are delivered through the supplier rather than through Revenue, with the supplier reducing the price by the tax relief and reclaiming it directly from Revenue. The most familiar legacy use of TRS was Mortgage Interest Relief, which delivered relief by reducing the monthly mortgage repayment. New mortgages have not received TRS since 2012 and the residual scheme expired at the end of 2020. A more recent example of a TRS-style mechanism is Mortgage Interest Tax Credit (announced for 2023 and extended for 2024), where the relief is claimed through myAccount rather than at source. Most other personal reliefs (medical expenses, pension AVCs, tuition fees) are not delivered at source but through the RPN or self-assessment.

TaxSaver Commuter Ticket

The TaxSaver Commuter Ticket scheme allows an employer to provide an annual or monthly public transport ticket to an employee free of income tax, USC and PRSI, with the cost recovered from the employee through salary sacrifice or paid in addition to salary as a tax-free benefit. Eligible tickets cover Iarnród Éireann (rail), Dublin Bus, Bus Éireann, Luas, DART, Go-Ahead Ireland and a number of regional and commercial bus operators. Annual TaxSaver tickets typically deliver savings of 30% to 52% on the gross ticket price compared with paying from net pay. The employee's gross pay is reduced by the agreed sacrifice each pay period and the employer reports the value of the ticket through PAYE Modernisation but does not deduct tax on it.

Temporary Wage Subsidy Scheme (Legacy)

Also: TWSS

The Temporary Wage Subsidy Scheme operated from 26 March 2020 to 31 August 2020 as Ireland's first major Covid wage support, replaced thereafter by EWSS. Under TWSS the employer paid the employee the subsidy (up to €410 per week, depending on prior net pay) which was treated as a non-taxable payment in the period but liable to income tax and USC at year end via reconciliation. The scheme generated a tax liability for many employees who were unaware of the deferred tax. Revenue placed any TWSS-related tax debt into a "warehoused" debt arrangement which most employees subsequently cleared in instalments through reduced tax credits over 2021 to 2024. TWSS does not appear on current payslips but may still appear in legacy P21s for affected years.

Termination Payment

A termination payment is any payment made by an employer to an employee on the cessation of employment. It is an umbrella term covering statutory redundancy, ex-gratia redundancy, payment in lieu of notice, garden leave pay, accrued holiday pay, accrued bonus and any settlement amount. Each component is taxed differently: statutory redundancy is fully tax-free; ex-gratia and enhanced redundancy benefit from the basic exemption (€10,160 + €765 per year), increased exemption or SCSB; PILON is fully taxable as Schedule E; accrued pay and holiday pay are fully taxable in the normal way. Termination payments above the relevant exemptions are subject to PAYE and USC but not PRSI. The total payment, the exempt portion and the taxable portion are all detailed in the final payslip and on the EDS.

Tuition Fees Tax Credit

Tax relief on qualifying tuition fees paid for approved third-level courses is available at the standard rate of 20%. For 2026 the maximum qualifying fees per claim are €7,000 per course, with a disregard of €3,000 (full-time) or €1,500 (part-time) applied to the total of all courses claimed in the year. So the maximum potential credit per family in a year is 20% of (€7,000 - €3,000) = €800 for a single full-time course. Multiple students can be claimed in the same year. Postgraduate courses, undergraduate courses, IT and foreign language certificates from approved providers all qualify. The credit is claimed in myAccount via Form 12 and refunded as part of the P21. It cannot be claimed where the fees have been reimbursed by an employer or scholarship.

Universal Social Charge

Also: USC

The Universal Social Charge is a tax on an individual's gross income, introduced in 2011 to replace the income levy and the health levy. USC is calculated on a different base from income tax: it ignores most reliefs (no tax credits, no SRCOP, no pension contribution relief) but is exempt on social welfare, certain redundancy payments and small earnings under €13,000 a year. For 2026 the standard rates and bands are: 0.5% on the first €12,012; 2% on €12,012.01 to €27,382; 4% on €27,382.01 to €70,044; and 8% on income above €70,044. Self-employed individuals with non-PAYE income above €100,000 pay an additional 3% USC surcharge on the excess. USC is deducted through PAYE in real time on a cumulative basis.

USC Band 1

USC Band 1 is the first band of the Universal Social Charge, charging 0.5% on the first €12,012 of an individual's taxable USC pay for 2026. It is the lowest rate and applies before any of the higher bands. For an employee with weekly USC pay of €231 (€12,012 / 52), the maximum USC payable in Band 1 is €60.06 a year. Band 1 is sometimes called the "entry rate" and was reduced from 1% to 0.5% in Budget 2022. The €12,012 ceiling has been held constant for several Budgets in nominal terms despite inflation. USC Band 1 applies regardless of marginal income tax rate or PRSI class. It does not apply to social welfare income, which is fully exempt from USC.

USC Band 2

USC Band 2 charges 2% on USC pay between €12,012.01 and €27,382 for 2026. The €27,382 ceiling is set at 52 times the weekly minimum wage of €526.58 (€14.15 x 39 hours, rounded), an alignment maintained by Budget policy to ensure that a full-time minimum wage worker remains within the 2% band rather than entering the 4% Band 3. The width of Band 2 is therefore €15,370, generating a maximum Band 2 charge of €307.40 a year. Band 2 was reduced from 4.75% to 2% in Budget 2022 and the rate has been held at 2% since. As with all USC bands, the Band 2 rate applies to USC pay rather than taxable pay, so reliefs that reduce taxable pay (like pension contributions) do not necessarily reduce USC pay.

USC Band 3

USC Band 3 charges 4% on USC pay between €27,382.01 and €70,044 for 2026. The width of the band is €42,662, generating a maximum Band 3 charge of €1,706.48 a year. Band 3 was reduced from 4.5% to 4% in Budget 2025 and held at 4% in Budget 2026. The €70,044 upper limit is the threshold above which the 8% Band 4 rate applies. Most middle-income full-time PAYE workers earning between €30,000 and €70,000 see most of their USC accrue in Band 3. Where an employee's USC pay is reduced by significant pre-USC deductions (very rare in practice), they may exit Band 3 back into Band 2.

USC Band 4

USC Band 4 charges 8% on USC pay above €70,044 for 2026. There is no upper ceiling, so a high earner pays 8% on every euro above €70,044, in addition to the 0.5%, 2% and 4% on the lower bands. For an executive earning €200,000, USC Band 4 alone produces a charge of €10,396 (€129,956 x 8%). Combined with PAYE at 40% and PRSI at 4.2%, the marginal rate at this income is 52.2%. Band 4 has remained at 8% since 2015, having been reduced from earlier higher rates introduced during the financial crisis. Self-employed individuals with non-PAYE income above €100,000 pay an additional 3% USC surcharge taking the rate to 11% on the excess.

USC Exempt Threshold

An individual whose total annual income from all sources does not exceed €13,000 is fully exempt from USC for the year. The threshold has been held at €13,000 since 2016. Where earnings exceed €13,000 even by one euro, USC applies to the full amount on the standard band structure (0.5%, 2%, 4%, 8%) with no €13,000 disregard. The exemption operates on actual income, not estimated income, so low-paid employees whose pay edges over €13,000 mid-year may see USC switched on retrospectively. Social welfare income, the State Pension, redundancy payments and statutory exemptions remain exempt from USC regardless of whether the €13,000 threshold is breached. Employees aged 70+ or full medical cardholders may also qualify for the reduced USC rates on Band 3.

USC Medical Card Reduced Rate

Holders of a full medical card whose total income for the year does not exceed €60,000 qualify for reduced USC rates. For 2026 the reduced structure is: 0.5% on the first €12,012; 2% on the next €15,370 (up to €27,382); 2% on the balance of income (replacing the 4% Band 3 and 8% Band 4 with a flat 2%). The reduced rate applies for the entire year provided the medical card is held for any part of the year and the income condition is met. Holders of a GP visit card do not qualify for the reduced USC rate. Where income exceeds €60,000, full USC rates apply on the entire income, not just the excess. The relief is administered through the RPN by Revenue once the medical card is registered.

USC Pensioner Reduced Rate

Individuals aged 70 or over whose total income for the year does not exceed €60,000 qualify for reduced USC rates: 0.5% on the first €12,012, 2% on the next €15,370, and 2% on the balance, mirroring the medical card reduced rate. The reduced structure replaces Band 3's 4% and Band 4's 8% with a flat 2%, capping the marginal USC at 2% rather than 4% or 8%. Where income exceeds €60,000 the full standard USC rates apply across the entire income, not just the excess. The pensioner reduced rate does not apply automatically; Revenue uses date-of-birth records to switch the RPN to the reduced rates from the relevant 70th birthday. Pension income from a private occupational scheme or ARF is treated the same as employment income for the €60,000 test.

USC Self-Assessed Surcharge

Self-employed individuals and proprietary directors with non-PAYE income (Schedule D Cases I, II, III, IV, V) above €100,000 a year pay an additional 3% USC surcharge on the income above €100,000. This brings the top USC rate for self-employed earners to 11% on the excess, compared with 8% for PAYE workers, in part to compensate for lower PRSI Class S benefits. The surcharge is collected through Form 11 self-assessment alongside the regular USC on Schedule D income. Where an individual has both PAYE income and Schedule D income, the surcharge applies only to the Schedule D excess above €100,000, not to the PAYE element. The surcharge has applied since 2011 and Budget 2026 retained it unchanged.

USC Year-to-Date

USC year-to-date is the cumulative USC liability calculated by the employer's payroll software at each pay period using the cumulative basis. Each pay period the software computes USC pay year-to-date, applies the four USC bands cumulatively (so the bands are spread evenly across the year on a 52-week basis for weekly paid, 12-month basis for monthly paid), arrives at the cumulative USC liability, and deducts the YTD USC already paid in earlier periods to derive the period USC. This means a one-off bonus that pushes monthly USC pay into Band 4 in one period will be smoothed over the rest of the year through cumulative recalculation, so the YTD USC at year end matches what an annual calculation would produce. The YTD figure is shown on every payslip.