Payroll and Social Security Updates in Ireland for 2025

As we prepare for 2025, significant updates to payroll, tax, and social security regulations in Ireland are set to take effect. At Parakar, we are committed to ensuring that your payroll systems are fully updated and compliant with these changes. Below, we’ve outlined the key updates to help you stay informed about what to expect in the coming year.

Income tax changes

The Irish government has announced several adjustments to personal income tax thresholds and credits.

PRSI (Pay-Related Social Insurance) Adjustments

Employer PRSI contributions

• Employer PRSI remains at 11.05% for salaries above €441 per week.
• The lower rate of 8.8% will continue to apply for earnings up to €441 per week.

Employee PRSI contributions

Employee PRSI rates remain unchanged at 4% for all employees earning more than €352 per week.

Minimum wage increase

The national minimum wage will increase from €12.70 per hour to €13.10 per hour, effective January 1, 2025.This change reflects the government’s goal of aligning minimum wage with the cost of living and improving low-income earnings.

Universal Social Charge (USC) changes

• USC Bands Adjusted for inflation: The 2% USC band will apply to annual incomes up to €25,000 (an increase from €23,000 in 2024).
• USC Exemption: Annual incomes under €13,000 remain exempt from USC.

Remote working allowance

The tax-free home office allowance remains at €3.20 per day to compensate employees for remote work-related costs. Employers may continue to reimburse this amount tax-free.

How Parakar supports you

At Parakar, we ensure:

• Seamless payroll updates. All legislative changes, including new income tax bands, PRSI thresholds, and minimum wage increases, are accurately implemented in your payroll systems.
• Compliance assurance. Our team actively monitors Irish labour and tax regulations to keep your operations fully compliant.
• Employee communication. We provide clear and accurate information to your employees, helping them understand the impact of these updates on their pay.
• Custom support. Whether it’s managing statutory sick pay or implementing remote working allowances, we tailor solutions to your specific needs.

Grow with Parakar in Ireland

At Parakar, we don’t just manage payroll, we’re your partner in business growth. Explore our range of services.

• HR Consultancy: Assistance with employment contracts, workforce planning, and compliance in Ireland.
• Payroll Consultancy: Let us optimize your payroll processes and solve any complex challenges.
• Employer of Record (EOR): Simplify international hiring without the need for a local entity.
• Payroll & HR full service: Seamless HR and payroll management, perfect for growing businesses looking for in-country expertise.

Why stop at payroll? Let Parakar help streamline your operations, improve compliance, and unlock growth opportunities. If you’re ready to take advantage of our services or have questions about these updates, reach out to us today. Together, we’ll ensure your payroll runs smoothly and your business thrives in 2025 and beyond.