Summary

Ireland has a comprehensive social security system which provides a range of old age, invalidity, sickness, unemployment and other social benefits, including family allowances and income guarantees. Entitlement to benefits generally derives from and individual’s contribution history, although some benefits arise due to residence in Ireland.

Details

Contributions

Employer PRSI contributions are uncapped and charged at just over 11% of total remuneration. Employee contributions are 4% of total pay above a low annual base. In addition, the Universal Social Charge (USC) is levied on employees at graduated rates up to 8% on income over €70,000 per year, plus a 3% surcharge if non-PAYE income is over €100,000 per year.

Treaties

Ireland has social security agreements with all European Economic Area countries and 9 other non-EEA countries, including the UK, the US, Canada, Australia and Japan. These agreements determine which country has the right the levy social security contributions, has the obligation to provide benefits, and prevent social security being levied twice on the same income. Most inbounds expatriates to Ireland therefore continue to pay home country social security and are exempt from Irish PRSI contributions, and most Irish outbounds remain liable.

USC remains payable in Ireland even for those assigned there with a certificate of coverage or an A1.

Exemptions

Ireland operates a 52 week exemption from PRSI contributions for individuals assigned into the country from outside the EU or other social security agreement country. Conversely, Irish employees leaving Ireland to go on assignment to a non-agreement country have a continuing liability to PRSI for the first 52 weeks of their assignment.

Administration

PRSI and USC payments are both administered through payroll and a single employee payment is made to the Collector General for both elements, covering both employer and employee contributions. These payments are due within 14 days of the end of the tax month, mirroring the UK payroll process.

Benefits

The state pension is the core of the Irish social security system, and entitlements are based on years of contributions. Other welfare benefits are also derived from PRSI payments. Universal Social Charge contributions, despite their name, do not provide any specific benefit entitlements.

Other

The availability of the exemption from PRSI for the first 52 weeks of an assignment to Ireland, as opposed to a local hire arrangement, generally makes expatriation more viable for individuals moving from non-agreement countries. Expatriates from high cost social security countries such as France can realise considerable savings through being hired locally.

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