The principal social security tax cost in Ireland is Pay Related Social Insurance (PRSI). PRSI is payable by both the employer (10.85%) and the employee (4%).
The employer is responsible for collecting all PRSI contributions, including the employee contribution and paying them to The Revenue Commissioners, together with Pay-As-You-Earn (PAYE) tax deducted from payments made to the employees.
Universal Social Charge (USC) applies to individuals whose income exceeds €13,000 per annum. The rates of USC are tapered from 1% to 8 %.
The USC is a separate charge to Income Tax and no reliefs are allowable against it.
A foreign employer who employs personnel to carry out duties in Ireland is responsible for deducting Income Tax from the earnings of each employee and paying this over to the Revenue Commissioners.
There is an exemption from this requirement where:
Members of approved private health insurance schemes are entitled to relief in respect of premiums paid under a contract which provides specifically for the payment of actual medical expenses resulting from the sickness of the person, his/her wife/husband/civil partner, child or other dependants.
Relief is granted at the standard rate of tax (20%) and is granted at source and need not be claimed by the taxpayer. The premium paid to the insurer will be reduced by an amount equal to the standard rate of income tax, and the insurer will be repaid the equivalent of the standard rate reduction by the Revenue Commissioners.
Under the PAYE system, the employer is responsible for deducting Income Tax, PRSI and USC from the earnings of each employee and paying this over to the Revenue Commissioners.