Ireland Social Contributions Guide

PRSI Overview

PRSI is a compulsory social insurance contribution paid by employees, employers, and self-employed individuals. Employees pay PRSI at 4% on all gross income with no upper ceiling. Employers pay PRSI at 8.8% on weekly earnings up to €441 and 11.05% on earnings above €441 per week. The self-employed pay PRSI at 4% (Class S) on all income, which provides access to a narrower range of social welfare benefits including the State Pension (Contributory).

PRSI is calculated on a weekly basis — known as the "weekly assessment" system. For employees paid monthly or fortnightly, the employer must still calculate PRSI on a weekly equivalent basis. There are approximately 11 different PRSI classes (A through S) covering different employment categories, with Class A being the most common for employees in industrial, commercial, and public sectors.

Employee PRSI (Class A)

Under Class A, employees pay 4% PRSI on all gross earnings — there is no upper ceiling or income threshold. For employees earning less than €352 per week (the PRSI contribution threshold), the employee contribution is reduced to 0% for the first €410 of weekly earnings. Once weekly earnings exceed €410, the full 4% applies to all earnings. This means PRSI for employees is calculated at 4% on all income, subject to a minimum contribution of €0 if weekly earnings are below the threshold.

Employees in specific categories may pay reduced rates. Class B, C, and D apply to certain public servants recruited before 6 April 1995 who pay lower rates (0.9% to 1.9%) but have correspondingly reduced social welfare entitlements. These closed classes are being phased out as public servants recruited after this date are on Class A.

Employer PRSI

Employer PRSI is a significant payroll cost in Ireland. The standard employer PRSI rate is 8.8% on the first €441 of weekly earnings and 11.05% on earnings above €441 per week. Unlike employee PRSI, there is no ceiling — the higher rate applies to all earnings above the threshold. For 2026, the weekly threshold for the higher employer rate remains at €441. Employers of low-paid workers may qualify for reduced rates under the JobBridge scheme or similar employment programmes.

Employers must register with Revenue as an employer and operate payroll through the Revenue Online Service (ROS). PRSI must be remitted to Revenue on a monthly or quarterly basis depending on the employer's PAYE/PRSI remittance schedule. Late remittance attracts interest at 0.0274% per day and may result in penalties. Employers are also required to maintain detailed payroll records, issue payslips showing PRSI deductions, and file annual P35 returns summarising all payroll deductions for the tax year.

Universal Social Charge (USC)

The Universal Social Charge is a tax on gross income introduced in 2011 to replace the income levy and the health levy. USC is charged at progressive rates: 0.5% on income up to €12,012, 2% on income from €12,012 to €25,760, 4.5% on income from €25,760 to €70,044, and 8% on income above €70,044. Individuals aged 70 and over, and those holding a full medical card, pay a maximum USC rate of 3% on income above €70,044.

USC is calculated on gross income before pension contributions but after certain deductions such as capital allowances. Unlike PRSI, USC is charged on an annual cumulative basis rather than a weekly basis, which means deductions are accumulated throughout the year to ensure the correct marginal rate is applied. Certain types of income are exempt from USC, including social welfare payments, rental income, and certain investment income. Self-employed individuals also pay USC on their trading income.

USC Exemptions and Reduced Rates

Individuals with total annual income of €13,000 or less are exempt from USC. Medical card holders aged under 70 pay the standard rates. Those aged 70 and over pay reduced rates: 0.5% on income up to €25,760, 2% on income from €25,760 to €70,044, and 3% on income above €70,044. Full medical card holders of any age also qualify for the 3% maximum rate on income over €70,044. There is also an exemption for certain payments made to specified charities or approved bodies.

USC is collected by employers through the PAYE system for employees, and by self-employed individuals through their annual Form 11 return. Unlike Income Tax and PRSI, USC applies to all forms of employment and self-employment income, but does not apply to social welfare payments, certain compensation payments, or income already subject to DIRT (Deposit Interest Retention Tax).

PRSI and USC Contribution Table (2026)

Compliance for Employers

Employers must register with Revenue at least 1 month before the first employee is hired. Registration is done through the Revenue Online Service (ROS) or myAccount. The employer must operate a payroll system that calculates PAYE Income Tax, PRSI, USC, and Local Property Tax deductions. Monthly remittances are required for employers with a PAYE/PRSI liability exceeding €20,000 per year; otherwise quarterly remittances are permitted.

Employers must file an annual P35 return (Employer Annual Return) by 14 February following the end of the tax year. This return summarises all pay and deductions for each employee. From 2024, Revenue requires real-time reporting through Payroll Submissions (PSP) for larger employers, with full real-time reporting expected to be mandatory for all employers in the coming years. Failure to comply with PRSI obligations can result in penalties, interest charges, and prosecution by Revenue.