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January 20, 2023

Employee Benefits Ireland: What You Should Offer in 2024

Ireland offers statutory, supplementary, and state-sponsored employee benefits. Learn about each benefit, how to manage them as an employer, and more.

Aine Kavanagh

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Aine Kavanagh

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Employees in Ireland enjoy a few different types of employee benefits:  

  • Mandatory benefits, like paid annual leave.

  • Supplementary benefits and perks, such as private health insurance.

  • State-sponsored benefits, like the State Pension and maternity benefits.

But you may be wondering…

How do I offer these benefits to my employees?

And who qualifies for Irish employee benefits?

Keep reading for all the answers about employee benefits in Ireland. 

Further Reading

What Are Employee Benefits?

Employee benefits are non-wage incentives in an employee’s compensation package.  

This includes retirement contributions, health insurance, work flexibility, paid leave, and more.

Employers bear the cost of these benefits. 

Why offer employee benefits in the first place?

Employers are legally required to provide certain benefits in Ireland. These are known as mandatory benefits and we’ll learn about them soon. 

Employee benefits may also:

  • Improve productivity: Benefits like annual leave, health insurance, and income protection give employees the headspace to be their most productive. It means less stress about work fatigue, health care and finances. 

  • Provide work-life balance: Flexible working arrangements, remote work opportunities, home office stipends, and fitness benefits show employers care about employee wellness. The resulting work-life balance may reduce stress and prevent burnout — leading to happier, healthier, and more productive employees. 

  • Boost job satisfaction and morale: Employees are happier and more satisfied when they feel valued. This also leads to better employee retention. 

Okay, employee benefits are important. 

But what should you offer as an employer in Ireland?

3 Types of Employee Benefits in Ireland

Employees can get three types of benefits in Ireland:

A. Mandatory Benefits

The Irish government requires all employers to provide mandatory (statutory) employee benefits. 

These include: 

  • Retirement Contributions (Pension Contributions)

  • Pay Related Social Insurance (PRSI)

  • Paid Annual Leave Entitlements

1. Retirement Contributions

Irish employers have to give their ‘excluded employees’ access to a Personal Retirement Savings Account (PRSA)

It’s a long-term personal pension plan that lets employees save for retirement. 

Who are excluded employees?

Excluded employees are those:

  • Who have to wait more than six months after joining to get access to a private pension plan (occupational pension scheme), or

  • Who don’t get access to an occupational pension scheme from their employer.

Employees who make payments to this contributory pension scheme can get income tax relief on those payments. 

We know what you’re thinking… 

Should employers contribute to PRSA plans?

Not necessarily. 

You only need to enter into a contract with a PRSA provider and facilitate employee access. 

But if you decide to contribute on behalf of an employee, it’ll be considered a benefit-in-kind. Businesses may receive a certain amount of tax relief on employer contributions against corporate tax.

Despite the legislation only requiring employers to offer access to a PRSA, you can offer private pension schemes where employees usually contribute 5% of their salary. The employer contributes another 5% to match it. These are known as defined contribution schemes.

Check out our detailed guide to Tax Relief on Pension Contributions in Ireland.

2. Pay Related Social Insurance (PRSI)

Pay Related Social Insurance (PRSI) in Ireland is a government-mandated insurance contribution that funds social welfare benefits and pensions.

Every employed person over 16 years must make PRSI contributions. 

The amount is decided based on the employee’s pay and type of work — but it’s usually 4% of income for anyone earning over €352 a week

Now:

It’s not just the employee who contributes to PRSI.

The employer deducts the employee’s amount from their salary and then adds the employer portion of 11.05% before making the total contribution. 

The amount deducted from the employee is always displayed on their payslip. 

What’s more?

Ireland’s Department of Social Protection (DSP) strictly monitors PRSI payments. 

Every year, DSP inspectors arrive at workplaces to identify employers who:

  • Aren’t making PRSI contributions.

  • Don’t have proper PRSI records. 

  • Understate employee wages. 

  • Encourage jobseeker payments to employees.

What happens if you’re found guilty of non-compliance?

The DSP can impose hefty penalties. Plus, you’ll suffer reputational damage. Yikes!

Note: The Irish government has announced changes to employee and employer PRSI contribution rates as part of the 2024 Budget. The new rates will come into effect from 1st October 2024.

3. Paid Annual Leave

Statutory paid leave in Ireland is four weeks per year

So you must offer employees at least four weeks, or 20 days, of paid leave. 

Maternity, paternity, parental, adoption, and carer’s leave are statutory benefits. However, employers aren’t required to pay for them.

B. Supplementary Benefits & Perks

Besides the legally mandated employee benefits, you could also offer supplementary benefits.

These may include a wide range of discretionary benefits (benefit-in-kind) such as:

  • Private Health Insurance

  • Paid Leave for Parents

  • Income Protection Insurance

  • Life Assurance

  • Dental and Vision Plan

  • Stock Options

  • Fitness Benefits

  • Work Flexibility

  • The Cycle-To-Work Scheme

  • Employee Assistance Programme (EAP)

  • Tax-Saver Commuter Benefits

  • Subsidised Food / Social Committees and Events

  • Extra Holidays

  • Training and Development Courses

1. Private Health Insurance

All Irish residents are entitled to the public healthcare system. 

But many employers provide their employees with private health insurance plans for faster, specialised care. 

Some companies even offer health insurance plans to employees’ family members!

Since private medical insurance is considered a benefit-in-kind, employees are taxed on the value of their insurance premiums. 

Employers can work with platforms like Kota to easily enrol and manage their employees’ health insurance plans. 

2. Paid Leave for Parents

As mentioned earlier, employees have a statutory right to take maternity, paternity, parental, and adoption leave. 

The kicker?

Employers aren’t legally required to pay for these. Most of them are covered by social insurance (PRSI).

With that said, many employers provide compensation for employees taking maternity, paternity, parental, and adoption leave.

Here’s how the different types of leave for parents work in Ireland:

  • Maternity leave: 

    • Pregnant employees can take 26 weeks of maternity leave. 

    • During these 26 weeks, the government pays a Maternity Benefit if pregnant employees have enough PRSI contributions

    • They can also take 16 weeks of unpaid additional maternity leave.

    • They should take at least 2 weeks of leave before delivery and at least 4 weeks after the birth. 

  • Paternity leave: 

    • This amounts to 2 weeks during the first 6 months after the child is born or adopted. 

    • Paternity applies to the child’s father, the mother’s partner, or the parent of a donor-conceived child. 

    • Anyone with enough PRSI contributions can get a Paternity Benefit from the Department of Social Protection. 

  • Parent’s leave: 

    • This gives each parent access to 7 weeks of leave during the first two years of the child’s life.

    • Adoptive parents can access this leave within 2 years of adopting the child. 

    • Parents can get a weekly Parent’s Benefit of €250 if they have enough PRSI contributions.

  • Parental leave: 

    • Parents of older children can take up to 26 weeks of parental leave per eligible child before their 12th birthday. 

    • There are no government benefits paid for parental leave. However, employees can get credited PRSI contributions to protect their social insurance record, and their entitlement to future benefits.

  • Adoptive leave: 

    • Provides one parent of an adopting couple or a parent who is adopting alone access to 24 weeks of leave. 

    • The 24 weeks begins on the day the child is placed in the care of the parents.

    • Employees can receive an Adoptive Benefit if they have enough PRSI contributions. 

Wait, we’re not done yet. 

In addition to what’s covered above, employees can also take carer’s leave

It’s an unpaid leave where employees can take between 13 and 104 weeks to provide full-time care for anyone in need. 

3. Income Protection Insurance

Income protection insurance plans (aka permanent health insurance) provide a replacement income for employees who can’t work due to illness or injury. 

How can you provide income protection?

  • Short-term protection plans: You could provide short-term protection plans (monthly payments for fewer than two years) for employees who may fall ill or become injured during employment. 

  • Long-term protection plans: You could offer long-term income protection plans that pay 50-70% of an employee’s salary for a minimum term of five years.  

4. Life Assurance (Death-in-Service Schemes)

Some employees receive life assurance plans as part of their benefits package. 

Why provide life assurance schemes?

Life assurance aids financial dependents if an employee suddenly passes away. 

Generally, the sum assured equals about four times the employee’s base salary. Employees are often covered by the plan as long as they remain under the employer. 

Since life assurance (or even life insurance) schemes are established under trust, the dependents can quickly receive the benefits.

5. Dental and Vision Plan

In addition to private health insurance plans, employers can offer separate optical and dental insurance plans.

But you might be wondering…

Aren't dental and vision already part of my health insurance package? 

Most health insurance plans don’t cover optical and oral health. Employers may need to pay extra to obtain dental and vision plans for employees.

So what do these plans cover?

  • Optical benefits cover the costs of eye check-ups and emergency appointments. 

  • Dental benefits usually cover dental appointments, cleaning, extractions, fillings, and some dental surgeries. 

But here’s the thing:

Since these plans are considered a benefit-in-kind, they’re subject to taxation. That means employees have to pay PRSI, Pay As You Earn (PAYE), and Universal Social Charge (USC) on the value of these benefits.

6. Stock Options

Some employers in Ireland offer company stock as compensation for their employees or workers.

The most common stock option programs are:

  • Restricted Stock Scheme: These plans allow employees to purchase stock easily, but there are restrictions on disposing of those shares.

  • Approved Profit Sharing Scheme (APPS): This allows employees to convert profit-sharing bonuses into the business’ shares.

7. Fitness Benefits

Want to encourage a workplace fitness culture?

Offer fitness benefits! 

Maybe you could offer a free onsite gym for employees. 

Or perhaps, partner with local gyms for free or discounted employee memberships. 

You could offer additional benefits like:

  • Weekly yoga or pilates classes.

  • Mental health support.

  • Cycling, running and walking events and challenges.

  • Onsite health screenings. 

Some fitness benefits, like gym memberships, are considered benefits-in-kind, and employees can be taxed on their value. 

Employers generally don’t pay tax on benefits provided to employees — the tax amounts are reduced from employees’ gross pay. 

8. Work Flexibility

Thanks to the pandemic, flexible working arrangements have become the norm. 

What’s the scenario in Ireland?

Employers offer flexible work benefits like compressed work weeks during the summer, flexible working hours, and work-from-home days. 

Some employers even offer their employees a home-office stipend! 

These stipends help employees meet work-related expenses like the cost of internet and telephone bills. 

Employees don’t have to pay tax on home-office stipends for amounts up to €3.20 per day.

The Irish government has rolled out the Work Life Balance and Miscellaneous Provisions Bill 2022. It introduces more work-life balance provisions to the Irish employment law, such as an employee’s right to request flexible working arrangements.

9. The Cycle-To-Work Scheme

This government initiative allows employers to purchase bicycles and safety equipment worth up to €1,250 (€1,500 for an e-bike). 

Employees can then repay the cost from their salary before taxes, helping them save on the purchasing cost. 

10. Employee Assistance Programme (EAP)

This confidential counselling and information service is usually made available to all permanent employees and their family members.

What does it cover?

EAPs generally focus on helping employees resolve personal problems that may affect their performance at work. These include substance abuse, child and elder care, financial and legal trouble, relationship issues, etc. 

Some EAPs also provide adoption assistance, nurse advice lines, and even support staff who have faced accidents and other traumatic incidents at the workplace. 

11. Tax-Saver Commuter Benefits

Under this benefit scheme, employers can pre-purchase public transit tickets and allow employees to pay them from their pre-tax wages. 

You can manage these programs in-house or through third-party vendors.

12. Subsidised Food / Social Committees and Events

Some ways you can offer these benefits are:

  • Free vending machines

  • Juice bars

  • Onsite restaurants

  • Social events like sponsored night-outs 

13. Extra Holidays

Some Irish employees get extra time off in addition to the statutory entitlement of 4 weeks. 

The most common annual leave amounts to 4-8 extra days of paid leave. 

But look:

Before 2022, many employers provided some sort of paid sick leave for their employees — although it wasn’t mandated.

In July 2022, the Irish government passed the Sick Leave Act of 2022

Under this, Irish employees get access to three paid sick days in 2023, five in 2024, seven in 2025, and 10 paid sick days from 2026 onwards. 

The employer should pay employees 70% of their daily wage up to a maximum of €110 per day.  

14. Training and Development Courses

Want to upskill your team?

Offer them training and development courses (through in-house or external providers) while employed. 

Employees can sign up for professional memberships, mentor programs, online courses — you get the drift. 

Now:

Employees don’t have to pay tax on these benefits when the training:

  • Directly relates to their job.

  • Relates to what the business does.

  • Helps facilitate work required in the company.

C. State-Sponsored Benefits

The Irish state also provides employees with certain benefits. 

Let’s take a look at some of them:

  • Invalidity Pension

  • Contributory Death Benefits

  • Public Health Services

  • Illness Benefit

  • The State Pension

  • Maternity Benefits

1. Invalidity Pension

The state issues an invalidity pension for those who couldn’t work for at least 12 months — typically someone who received illness benefits for a minimum of 12 months. 

The receiver must have enough social insurance contributions (PRSI) contributions and satisfy other conditions, like being ineligible for any work. 

Find out how one can benefit from the Invalidity Pension in Ireland

2. Contributory Death Benefits

A widow/widower can receive a pension if all contribution conditions have been met on either spouse’s PRSI records as of the date of death.

The catch?

The two PRSI records can’t be amalgamated to qualify for the pension. 

3. Public Health Services

Any ordinarily resident person in Ireland and some visitors can access public health services for free or at a subsidised cost. 

Who’s an ordinarily resident person?

Ordinarily resident people are those who’ve lived in Ireland for at least a year or those who intend to live in Ireland for at least one year. 

They have two types of eligibility for public health services:

  • Medical card holders receive full eligibility.

  • Non-medical card holders receive limited eligibility.

Wondering what limited eligibility entails?

Limited eligibility means you don’t get free general practitioner (GP) services and must pay for prescribed medicines. 

However, you get access to public hospital services for free or at a subsidised cost.

4. Illness Benefit

Employees under 66 years suffering from an illness that prevents them from working may be eligible for an illness benefit. 

But here’s the thing:

Their illness must be certified by a medical practitioner, and the individual must have enough PRSI contributions to be eligible for this benefit. 

Learn more about the Irish Illness Benefit, including its payment rates. 

5. The State Pension

A person above 65 years is eligible for the state pension if they:

  • Started making PRSI contributions before 56 years of age.

  • Meet the required number of PRSI contributions.

  • Meet other specified criteria.

Want more information on the Irish State Pension?

Check out our in-depth guides on the two pension schemes:

6. Maternity Benefits

The maternity benefit is a payment made by the government to women who:

  • Are employed or self-employed.

  • Are on certified maternity leave.

  • Have enough PRSI contributions

  • Are in the appropriate PRSI classes.

The maternity benefit is usually paid for 26 weeks, coinciding with the statutory maternity leave period.

Who Qualifies for Statutory Employee Benefits in Ireland?

All full-time employees residing in Ireland are usually entitled to statutory benefits. 

On the flip side, independent contractors aren’t eligible for statutory benefits. 

But what’s the difference between a full-time employee and an independent contractor?

Full-Time Employees vs. Contractors in Ireland

A full-time employee will:

  • Work under an employer who directs how and when the employee should work. 

  • Earn a fixed amount of money regularly.

  • Work from a specific location (unless specified otherwise by the employer). 

  • Not subcontract the work.

  • And more such requirements.

Independent contractors are those who:

  • Work on a part-time basis or short-term projects. 

  • Work for multiple employers (clients) at the same time.

  • Have control over their work location and schedule.

What happens if you misclassify employees?

Employees will have tax and PRSI implications affecting their PRSI contributions, social welfare and employment rights, and USC (Universal Social Charge) payments. 

It gets worse…

Legislators can take action against employers for neglecting statutory benefits. If this happens, you risk significant fines and penalties. 

Avoiding regulator penalties is easy, right? 

What’s more critical is effectively managing your employee benefits scheme.  

7 Key Points for Employee Benefits Management  

As an employer, you must consider several things when handling an employee benefits scheme:

  1. Understand your organisation’s goals and objectives. Consider how the employee benefits align with your business’ vision.

  2. Evaluate all the statutory requirements you need to fulfil. Then, go beyond the bare minimum and offer more to your employees.

  3. Check what benefits your competitors offer their employees. Build a competitive benefits scheme to attract and retain talent accordingly.

  1. Consider your team and their requirements. See how you can deliver benefits they will appreciate the most.

  2. Think about investing in technology that helps you measure employee benefits utilisation.

  3. Brainstorm how you can introduce new benefits and remove underutilised perks. Involve your employees as much as possible. This helps them understand your reasoning and support any changes in benefits.

  4. Review your benefits scheme regularly to ensure cost-effectiveness and remain competitive. 

Bottom line?

Administrating a benefits scheme is no easy task. 

It’s a complex process usually conducted offline and involves tons of paperwork. 

What if we told you you could automate some of these benefits management — specifically, employees’ health and retirement benefits?

Meet Kota

Kota: Easily Manage Employee Health Insurance & Retirement Benefits 

Kota is a powerful benefits app that makes employee health insurance and pension management super easy. 

Kota supports:

  • Benchmark data to see how your employee benefits package compares to other local plans.

  • Scalable, automated benefit rollouts with minimal paperwork. 

  • Access to trusted insurance providers and financial institutions. 

  • Quick integration with your existing human resources (HR) and payroll platforms.

  • Local and international insurance plans in several European Union (EU) countries. 

  • Flexibility for individual members to control their options. 

Ready to get started with Kota?

All you need to do is:

  • Create an account and register your employees.

  • Design a benefits plan and existing and new employees as you go.

  • Your employees can enrol in your benefits plan easily.

  • Use the Kota app to manage your plan and billing. 

Empower Your Employees With Scalable Benefits Through Kota

Statutory obligations, state-sponsored benefits, discretionary perks… Managing an employee benefits scheme in Ireland is no walk in the park. 

The good news?

You can easily manage employee health insurance and retirement benefits with Kota. 

Join Kota today to save time and money — while keeping your employees happy!

Aine Kavanagh

Article written by

Aine Kavanagh

👋🏻 Hi I'm Aine, Head of Customer Success at Kota. Whether you're a Kota customer, a Kota user, or you're just browsing, I hope to help educate and empower those who want to know more about owning their own benefits, and building financial autonomy 📚

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