Payroll procedures in Ireland are clear on paper.
Where many employers struggle is not understanding what the rules are, but understanding how they fit together in real life — especially since payroll moved to real-time reporting.
Payroll is no longer something you tidy up at the end of the month. It is a live process, and every step matters.
So what are the actual procedures Irish employers are expected to follow?
It starts before the first employee is ever paid.
Before wages can be processed, a business must be registered as an employer with Revenue and set up correctly for PAYE Modernisation. This allows payroll submissions to be made in real time and ensures employees’ tax credits and cut-off points are applied correctly from day one.
Once payroll is live, one of the first decisions an employer makes is pay frequency. Employees must clearly understand how often they are paid — weekly, fortnightly or monthly — and payroll must run consistently on that schedule. Changing pay dates or running ad-hoc payrolls increases the risk of errors and missed submissions.
Each payroll run follows a defined sequence.
Pay is calculated first. This includes basic pay, overtime where applicable, and any additional payments. At this stage, minimum wage rules must be respected, and hours worked must be accurate. Errors here don’t just affect payroll — they can also become employment law issues.
Once gross pay is confirmed, statutory deductions are applied. PAYE, PRSI and USC are calculated automatically through payroll systems, based on Revenue instructions and employee tax details. These deductions are not estimates — they are precise calculations tied directly to Revenue records.
The most critical step then follows: the payroll submission.
Under Real Time Reporting, employers must submit payroll information to Revenue on or before the date employees are paid. This submission tells Revenue exactly who was paid, how much they earned, and what tax was deducted. There is no grace period and no option to submit “later”.
This is where many compliance issues arise. A payroll run that is accurate but submitted late is still non-compliant. Revenue focuses heavily on timing, not just correctness.
After the submission is made, employees are paid. Payslips must be issued, showing gross pay, deductions and net pay clearly. Payslips can be digital, but they must be accessible and accurate.
Revenue liabilities are then paid by the relevant due date, usually monthly. While the tax payment itself may be monthly, the reporting happens every time payroll is run. This distinction is often misunderstood.
Record keeping is the final — and often overlooked — part of the procedure.
Employers are required to keep payroll records, including payslips, submissions and supporting documentation. These records must be available if Revenue requests them. Increasingly, Revenue reviews payroll through data analysis rather than traditional audits, meaning inconsistencies can be flagged without warning.
Payroll procedures become more complex as businesses grow.
New starters must be set up correctly from their first pay. Leavers must be processed properly to avoid ongoing submissions. Overtime, bonuses, benefits and leave payments all add layers to the process.
What often causes problems is informality. A small change agreed verbally. A payment made outside the normal run. A delay explained away as “we’ll sort it next time”.
Under modern payroll rules, there often isn’t a safe “next time”.
Well-run payroll procedures are not complicated, but they are disciplined. The same steps are followed every pay run. Responsibilities are clear. Deadlines are respected. Submissions are reviewed, not assumed to be correct.
When payroll procedures are solid, payroll becomes routine. When they’re loose, payroll becomes a source of stress, employee frustration and Revenue risk.
Understanding the procedures is not about memorising rules. It’s about recognising that payroll works best when it is treated as a structured process, not an admin afterthought.
The procedure itself isn’t complicated. Where employers struggle is when payroll becomes rushed, informal or undocumented.
Payroll works best when it’s treated like a routine, not a reaction.