Employee benefits in Ireland: All you need to know

As the world is becoming more globally intertwined, the opportunities for remote hiring are increasing, allowing businesses to expand their hiring horizons right across the globe.

The COVID-19 pandemic has meant the workforce has been forced to adapt to remote work because of restrictions on travel and communal workspaces. As a result, it’s never been easier for employers to cast their net across borders and expand their talent pool to hot international talent markets like Ireland.

Ireland has become the European Headquarters for so many global organizations. The local labor market is filled with highly educated professionals with global experience. The country is especially rich in talent from the financial services sector, as well as digital and tech disciplines.

However, hiring Irish employees is not as straightforward for an international employer. You must understand and comply with Ireland’s unique local labor laws.

This article pulls together all the information you need to understand Irish employee benefits and which of them you are obliged to offer. We also cover some additional incentives and perks you can offer your employees and contractors to help you attract and retain the best professionals that Ireland has to offer. Read on to learn about the following:

• Who is entitled to benefits in Ireland?

• Statutory and common employee benefits in Ireland

• Supplemental benefits to consider for Irish employees

• How to set up and manage benefits for international employees

Who is entitled to benefits in Ireland?

Typically, all full-time employees in Ireland are entitled to receive statutory benefits.

Irish employment law is not limited to a single piece of legislation. Instead, it is governed by the statutes enacted in EU laws, the Irish Constitution, and common law. In addition, collective labor agreements in some industries take precedence, and the employment contract set up by the employer can specify additional benefits information beyond government mandated provisions.

Irish employment laws offer strong protection to employees hired in Ireland or outside of the country. The Irish employment equality legislation prohibits discrimination based on religion, sexual orientation, ethnicity, disability, age, and other grounds.

Note that independent contractors aren’t entitled to these statutory benefits. It’s important to understand this delineation to ensure you’re classifying workers correctly and meeting your minimum obligations as an employer.

Why you must minimize misclassification risk

Workers are classified based on a collection of factors, but in general the difference between an Irish employee and an Irish contractor boils down to a few key factors.

Full-time employees generally match one or more of the following:

• take orders directly from an employer

• work at a specific location

• earn a fixed salary on a recurring basis

Independent contractors generally match one or more of the following:

• more autonomy over their working process

• individual control over when and where they work

• can freelance for numerous clients at once

• work on short-term, part-time, or non-repeated projects

Regardless of whether you view a worker as an employee or a contractor, legislators will make the only determination that matters. If you’re found to have an employee relationship and you’ve neglected to provide statutory benefits, you’ll open your company up to the serious risks of misclassification and subsequent fines or penalties.

For more detailed information about understanding this concept, be sure to read our dedicated guide to misclassification.

Offering benefits for Irish contractors

Employers shouldn’t refrain from offering a benefits package to independent Irish contractors just because these entitlements aren’t mandated.

If you value your contractors, a benefits plan can build strong trust and connection with your business, especially in a remote context. You do still need to be careful of triggering permanent establishment or misclassification dangers with the type of benefits you provide.

Value-based benefits like paid time off, flexible working hours, and parental leave provisions can often keep you on the safe side of this legislation (more on this in our guide to offering benefits to international contractors).

An employer of record (EOR) like Remote should be able to give you more specific advice to minimize associated risks according to the employment legislation of Ireland (or any other nation).

Statutory employee benefits in Ireland

Statutory benefits, also known as mandatory benefits, are entitlements that employers are obligated by law to provide to their employees. Common examples include benefits like paid annual leave, parental leave, worker's compensation insurance, and paid sick leave.

Annual leave entitlements

Employees in Ireland are entitled to a statutory paid leave of four weeks per year. You can also offer more additional paid leave days to your employees as an extra incentive. With a large Irish diaspora overseas and a strong culture of traveling, this type of benefit will help you motivate and retain your employees in Ireland.

Employees in Ireland are also entitled to Carer's leave. Employees can temporarily leave work to provide full-time attention and care to a loved one or anyone else who needs it. The minimum duration for this leave is 13 weeks, and the maximum is 104 weeks. Their job must be made available on return.

This level of care must have been recommended by a general practitioner for the the person requiring full-time attention. The Department of Employment Affairs and Social Protection ultimately decides if the employee is entitled to this leave. Although the Carer's leave is unpaid, employees may be entitled to social welfare payments.

Maternity and parental leave in Ireland

Expecting mothers must take a leave of at least two weeks some time before their due date up until four weeks after the childbirth. In total, pregnant employees are entitled to 26 weeks of paid leave.

If the mother wants, she can also take 16 weeks of additional leave, but this is unpaid and must begin after the maternity leave ends.

New parents (other than the mother) can take a leave of two weeks in the first six months of the child's birth or adoption. They can take this leave at any time during these six months.

Parents of older children are also entitled to parental leave in Ireland. Employees whose children are 12 years or older can take 22 weeks of unpaid leave for each child.

If an employee adopts a child, they are entitled to 24 weeks of leave. The law is the same for a man or woman adopting a child alone. While these 24 weeks are paid, employees can also take 16 additional weeks of unpaid leave in the event of adoption.

It’s worth noting these parental leave provisions are comparatively middling, especially when considering the more progressive legislation in nearby Scandinavian countries.

We recommend providing additional parental leave to Irish employees to maintain a globally consistent parental leave provision.

In Ireland, family connections are strong and the immediate family unit tends to be very close. As a result, any additional provisions aimed at assisting with parental care are so highly valued in the minds of employees, and will be rewarded with dedication and commitment.

Pension plans/retirement contributions

Employers may offer occupational pensions to their Irish employees, but there is no legal obligation for them to do so. Larger employers in the country often provide supplemental schemes for their workforce, but small-scale employers generally don't offer pension schemes. The Pensions Authority regulates pension schemes, and each scheme has a different set of rules.

Again, we strongly urge global employers to consider providing a retirement pension plan as an additional benefit to Irish employees. This provision will help deliver equity with other global employees, and signal your care and commitment to your team. A benefit like this may be enough to urge a top-shelf candidate to join your business over a competitor.

Overtime

If an employee works on a Sunday, they are entitled to extra pay, which is often specified in the contract of employment. But if there's no such provision in the contract, the employer must offer the employee one of the following:

• a reasonable increase in pay

• a reasonable paid time off

• a reasonable allowance

What is considered ''reasonable?'' That depends on the kind of work an employee does and their specific industry. We recommend building specific language about this provision into your employment agreement to make things clear for both parties.

As for overtime pay, which refers to the work done outside an employee's normal working hours, the employer has no legal obligation to pay for these hours. Also, there are no statutory levels dictating the overtime pay. But many employers pay higher overtime pay rates to their employees. All of this can be specified beforehand in the employment contract.

The Irish law makes such employees entitled to a bandof hours or banded weekly hours. This means that the employees' contracts will better reflect the number of hours they work over a 12-month period.

Insurances

Employed people over the age of 16 in Ireland are required to make contributions to Paying social insurance (PSRI). The amount each employee pays differs based on their earnings and the type of work they do.

That's why it's called Pay Related Social Insurance. Both employees and employers have to make paid contributions towards social insurance. The employer deducts the employee's share of the contribution directly from their wages.

The Revenue then collects this amount and keeps a record of the contributions by the Department of Social Protection and the employer. The Payment of Wages Act 1991 states that the employee must get a payslip when they're paid.

The deduction made for the PRSI contribution must be noted on the payslip. As mentioned earlier, the employer also has to contribute to the PRSI, but this contribution is not deducted from the employee's wage. An employer must pay 11.05% to pay related social insurance.

Every year, the Department of Social Protection sends inspectors to workplaces to identify employers who:

• Are not paying PRSI contributions for their employees

• Are encouraging their employees to claim jobseeker payments

• Do not have proper records for PRSI contributions

• Are understating the wages they're paying to employees

If an employer is found in non-compliance, the inspectors can fine them. Similarly, employers who do not have proper records of their social insurance contributions face penalties. This is a great example of how non-compliance can cost you monetarily and in subsequent reputational damage.

Want to see a full breakdown of employment costs for new hires in Ireland? Check out our free Employee Cost Calculator tool.

Benefits & Leave —

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Supplemental benefits to consider for Irish employees

You must provide statutory employee benefits to satisfy required regulatory compliance, but growth-focused employers should provide supplemental benefits to attract, motivate, and retain the best local talent.

Remote cares passionately about providing perks and benefits to enable your global team to enjoy security, stability, and work-life balance. Our team of internal HR specialists and global benefits experts are constantly working with our customers to create customized and competitive benefits packages to attract top talent.

Offering the bare minimum won’t cut it with the best professionals in almost any international talent market. Workers are starting to seek out certain perks now that remote work is readily available with businesses across the world (we explain in more detail in our values-based benefits guide).

Private health insurance

Ireland has both a public health system and a private health system. Any Irish resident can access public health services, usually at no cost, but it is customary for employers to provide additional private health coverage for shorter wait times and access to more specialized care.

Irish employees seek out and sometimes expect some form of supplemental health insurance. We strongly advise international employers to consider this benefit to give their employees access to more premium coverage.

Private insurance inclusions can range from dental to optical coverage as well as other specialized private insurance that the public sector may be too limited to comprehensively include. This will help employees pay for additional medical care such as emergency room visits, hospital stays, outpatient surgery, and other potential extra costs.

Indeed, offering health cover, or other additional insurance benefits (like dental insurance, vision insurance, and life insurance), can be such an effective way to build trust with new hires and separate your offer from that of a competitor.

Home office stipend

Employees are not only interested in traditional benefits. Many Irish workers are actively seeking roles with companies that embrace the concept of work-life balance and enable flexible working from home.

One way to reinforce that culture is by offering remote-work benefits like a home office stipend. This is a relatively inexpensive benefit that offers significant increases in employee efficiency and productivity.

Allowances to compensate for the likely increased cost of internet, electricity, and phone contracts will also help to provide specific support for Irish people working from home.

Flexibility in work hours

Remote work has also shown that the regular nine-to-five grind can be replaced by a bit more flexibility.

The provision of flexible work hours in a contract adds value towards work-life balance, which again is continuously changing alongside remote and hybrid work environments.

Personal development

Employees want their employer to contribute to their growth. Affordable perks like investing in personal development help workers learn new skills. These programs also improve employee retention while showing your team that you care about their professional advancement.

Value-based benefits to attract remote workers

As more employees moved toward remote or hybrid working solutions over the past couple of years, the demand for employer-provided support in this area continues to increase.

Allowances to compensate for the likely increased cost of internet, electricity, and phone contracts will also help to provide specific support for Irish employees working from home.

Additional perks can also act as powerful motivators for star candidates to join and stay with a given company and we’ve gathered a short list below for you to consider:

• personal learning budget

• flexible working hours

• therapy or coaching allowances

• mentorship programs

• volunteering days

• birthday leave

• meal and travel expenses

• gym or health club membership

The size of your business shouldn’t prevent you from sourcing international talent either. If you’re a smaller business looking to employ Irish talent (or any other international workers), you can still develop a competitive and compliant benefits plan. This small business guide to affordable global benefits will help you find inexpensive perks that international employees will love.

Providing cost-effective benefits packages to remote workers

Bundling supplementary and soft benefits into a job offer always comes with key considerations in terms of cost-effectiveness. This is especially true for businesses of smaller scale that want to work with remote employees in Ireland but may struggle to remain competitive in the job market and thus lose out on providing benefits.

Home office support stipends and supplementary insurance coverage notwithstanding, you can tweak your benefits package to suit the nature of the work required from your remote workers to include benefits such as more paid time off, or even, assistance with basic needs such as groceries and food.

There are also more traditional approaches like stock options or profit-sharing, which lend themselves well to responsibilities with high ownership and impact.

The key is to spend less on vanity perks and actually focus on benefits that let employees live the lives they want — which is made possible by their situation as remote professionals. You can read our guide to affordable perks small businesses can offer remote teams to learn more.

How to set up and manage benefits for international employees

Complex international hiring as well as managing payment and benefits for global workers is a challenging task because the processes involved are incredibly difficult to manage internally.

You need a solution that allows you to stay compliant with all of the local labor laws in each country of operation.

Instead of building a fully-owned local legal entity with a specialist HR function in each new market, an employer of record (EOR) provides a cost-effective, fast, and secure alternative to help you grow your team across borders.

When should you use an employer of record?

If you don’t have an established process to manage the complicated parts of scaling global hiring In Ireland, or in any other country – an EOR like Remote will give you immediate relief.

Remote’s EOR service gives you the advantage of dedicated local employment experts that can offer the insight you need to create a strong benefits package, a compliant employment contract, and a competitive offer to your candidate.

Remote manages the complicated parts of international employment. The combination of Remote’s simple software hub and our team of global HR experts combine to organize all the tiny details of managing a distributed team.

Our team of global employment experts handles the complexities of running your global HR operations in the backend and our software puts everything in one dashboard where you can:

• Manage payroll and time off

• Handle local employment taxes

• Stay compliant with statutory benefits

• Offer competitive and equitable global compensation packages

• Scale your global team faster

You can learn more about how Remote simplifies international hiring so you can scale your distributed team faster.

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