What are the payroll implications for remote workers In Ireland?

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The increased shift to remote working has provided opportunities for employees to work across borders. All employees performing duties of their employment in Ireland are subject to income tax, social security, and universal social charge on the income attributable to the performance in the State of those duties, regardless of whether they are employed by a branch, an Irish limited company, or a foreign company.

The employer is required to deduct the payroll taxes at source from all salary payments and taxable benefits-in-kind under the Pay As You Earn (PAYE) system and it is the employer’s responsibility to ensure that the PAYE system is operated correctly.

If an employer pays income which is within the scope of the PAYE system but fails to register for that purpose, the Revenue Commissioners may compulsorily register the employer, estimate the tax due and seek payment of the amount of deductions the employer should have made under the PAYE system.

Short Term Assignment

If any of the employees come to Ireland on a short -term assignment, the employer may apply to Revenue for an exemption from the obligation to deduct taxes provided certain conditions are met. 

The conditions include the requirement that the employee will be present in the State for a period or periods not exceeding 183 days in the aggregate in a year of assessment and that payroll taxes will be withholding source in the ‘home’ country on the income attributable to the performance in the State of the duties of the foreign employment (evidence of withholding taxes must be provided to Revenue by sending copies of the last three month’s pay slips).

There is a strict deadline for making the application so once you become aware that employees are coming to Ireland and may meet the conditions, then please contact OSK for advice.

Long Term Assignment

The payroll details are required to be submitted online to the Revenue Commissioners on a “real-time” basis via Revenue On-Line (ROS) and the taxes are due for payment by 23rd of the following month.  If the taxes are paid late, the Collector may charge interest.

OSK provides the following service to Employers:

• Advise on the potential liability in Ireland including applying for exemption if conditions are met
• Taxes registration
• Process the payroll and issue payslips and payroll reports
• File the payroll details via ROS and arrange payment of the taxes
• Advise on payment of social security

Social Security

The employees may qualify for an A1 portable document or a Certificate of Coverage so that they are retained in the social security/national insurance system of their home country.   This may be beneficial to keep up their entitlement to social security benefits in particular long-term state pension rights. 

If you require any further details on foreign employers relocating employees to Ireland or in relation to our International Tax services, please contact Imelda Prendergast on 01 439 4206.

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