Employer costs in Ireland

What does an Irish employee cost an employer in 2026?

About 12.75% of gross salary on top of pay, for an employee inside pension auto-enrolment earning between €552 a week and €80,000 a year. That is employer PRSI at 11.25% plus a 1.5% employer contribution to pension auto-enrolment.

Two recurring statutory contributions apply to every employment, which makes the arithmetic short and the boundaries the whole story. Employer PRSI carries the 1% National Training Fund levy inside its published rate and the auto-enrolment contribution sits alongside it. Where a Sectoral Employment Order or an Employment Regulation Order covers the work, it adds further recurring employer contributions on top. Both bounds are load-bearing and a figure quoted without them misprices hires at either end of the range.

Every figure below is a percentage of gross contractual salary over twelve months. Ireland has no statutory thirteenth month and annual leave is paid at the normal weekly rate during the leave rather than as an extra payment, so it sits inside the twelve months. The public holiday entitlement is the exception, because an employer may discharge it with an additional day's pay.

The lower boundary is set where a full-time minimum-wage week lands, not above it. A full-time employee on the national minimum wage of €14.15 an hour working a 39-hour week earns €551.85, which sits just under the €552 threshold. That is not a coincidence: the threshold rose from €527 to €552 on 1 January 2026 in line with the minimum wage increase and the two are deliberately coupled.

Why does the employer rate not fall away at higher salaries?

Because employer PRSI has no upper earnings limit and because the rate applies to the whole of the week's earnings rather than to the part above the threshold.

Those are two separate points and each changes the arithmetic on its own. Take the second first. Employer PRSI is not charged in slices. Once weekly earnings exceed €552, the Class A employer rate of 11.25% applies to all of that week's earnings, not just to the excess. On a €600 week the charge is €67.50. Read as a marginal charge on the €48 above the threshold it would look like €55.08 and a cost model built that way understates every hire above the threshold.

The first point decides how a senior hire prices. There is no ceiling on employer PRSI at any income level, so once weekly earnings exceed €552 the 11.25% applies to all of that week's earnings however high the salary goes. The employer cost of a senior hire scales with pay rather than tapering off.

Employee PRSI behaves the same way at the top and differently at the bottom. It is 4.20% above €352 a week and nil at or below, with a tapered €12 weekly credit between €352.01 and €424, and it has no ceiling either.

What does pension auto-enrolment add and where does it stop?

1.5% of gross pay now and it stops on gross pay above €80,000 a year. It is the newest line in the Irish stack and the one most likely to be missing from a cost model built before 2026.

MyFutureFund began collecting in January 2026. The employer contribution is legislated to rise on a published schedule: 3% at year four, 4.5% at year seven and 6% from year ten. That is a cost written into law on dates already fixed rather than one that moves with policy.

Two mechanics decide whether it applies at all. The first is eligibility: employees aged 23 or over and under 60, earning €20,000 or more a year across all employments including exempt ones, whose own employment is not exempt. Employees aged 18 up to pensionable age in a non-exempt employment can also opt in. The second is the ceiling and it is an annual aggregate rather than a per-job figure: contributions stop on gross pay above €80,000 a year counted across all of a person's non-exempt employments.

The exemption turns on payroll rather than on paperwork. It is a payroll test, not a question of whether a pension scheme exists. An employment is exempt where a contribution to a qualifying scheme is already being paid through payroll and reported to Revenue (the Irish tax authority), from either the employee or the employer. A scheme whose contributions are not reported to Revenue through payroll does not exempt the employment.

What happens on 1 October 2026?

Every Irish PRSI rate rises by 0.15 percentage points. Employer PRSI goes to 11.40% and 9.15%, employee PRSI goes to 4.35% and the statutory stack goes to about 12.90% inside the same salary band.

Three things are worth being precise about. The increase is in percentage points, not a proportional 0.15% of the existing rate. It is enacted law rather than a proposal: the Social Welfare (Miscellaneous Provisions) Act 2024 substitutes the rates with effect from that date. And it sits under the Government's PRSI Roadmap rather than under Budget 2026, which is why it does not appear in Budget commentary.

October 2026 is also not the last step. The same Act fixes a further rise of 0.15 percentage points on 1 October 2027 and 0.2 percentage points on 1 October 2028, so a cost model built now can carry all three dates rather than revisiting the question each autumn.

Nothing else moves on that date. The minimum wage, the USC bands, the income tax bands and standard rate band, the €600 redundancy cap, the €110 sick-pay cap, the €80,000 auto-enrolment ceiling and the employment permit thresholds are all unaffected. A cost model only needs its PRSI lines and their derived totals updated.

What sits outside the headline figure?

The 12.75% covers the two recurring statutory contributions and nothing else, so several real employer costs sit outside it.

Statutory costs that arrive on an event rather than on every payslip sit outside it. Statutory sick leave is five paid days a year at 70% of usual daily earnings, capped at €110 a day, for certified leave only and available after thirteen weeks' continuous service. Statutory notice runs from one week to eight by length of service, beginning at thirteen weeks' service. A statutory redundancy lump sum is two weeks' gross pay for each year of service plus one bonus week, with both elements capped at €600 a week, after 104 weeks' continuous service in fully insurable employment.

Sector pay instruments sit outside it too. Where a Sectoral Employment Order or an Employment Regulation Order covers the work, it can impose recurring employer contributions of its own and those are set by the instrument rather than by the general law.

Then the contractual and administrative lines: any occupational pension above the auto-enrolment minimum, health insurance, other contractual benefits and the employer's own cost of running payroll on Revenue's real-time reporting, which requires a submission on or before every payment of wages rather than a periodic return.

One thing genuinely is not there. Ireland sets no statutory annual bonus or thirteenth month payment. A bonus is payable where a contract, a policy or established practice provides for it and once payable it is wages.