Paying Salaries in Ireland

Irishkid

Hi All,

if I open a branch office in Ireland, is there something special you need to take into consideration when paying salaries for example? I would be starting off with one or two people so I am wondering if this is an overly complex thing accountancy wise, for example, would I need an accountant? FOr example how do I create a payslip?, Can I just pay them an amount then they pay all the tax, social sec themselves?

Cheers

Colm

ssbob

Hi Colm,

Are you starting a new business in ireland or are you opening a branch office here from an existing business in the EU or outside of the state?

Irishkid

Hi,

it would be a branch office of an existing company in Spain.

Cheers

Colm

ssbob

Hi Irishkid,

The best way to do this would be for you to take people on a self employed contract. Basically that will mean they will be accountable for all their own tax affairs other wise it can be quite messy and if you do not have experience of it here then you would need to take on an accountant.

What will happen is they will give you an invoice weekly/monthly including vat(depending on how much you will be paying-€37k approx threshold) and you will pay it to them. If they do not account for their own affairs then that is their problem not yours.

May I ask what type of work it will be?

Irishkid

Many Thanks,

would they still be considered employees of my company or would they be considered as subcontractors?

The company will be performing research in the agrofood sector.

Cheers

Colm

neris

If you employ them as employees you will have to pay employers prsi so when your sending the revenue the employees tax deductions you have to pay for the privelage of employing them. (and they wonder why companies wont employ people)

ssbob

They would be considered subcontractors.

dbran

Irishkid wrote: »

Many Thanks,

would they still be considered employees of my company or would they be considered as subcontractors?

The company will be performing research in the agrofood sector.

Cheers

Colm

Hi Colm

You have hit upon a very important issue here. Whether or not they are considered employees or subcontractors is a question of fact and not just because you want to avoid the hassle of employers PRSI, employment legislation etc.

There are certain criteria which the revenue will look at which will determine whether or not they are employees or subbies. A good summary is given here.http://www.revenue.ie/en/tax/rct/determining-the-correct-employment-status-of-a-worker.html

Treating a person as a subcontractor when they are really employeees will result in substantial interest and penalties as well as having to pay all of the unpaid PAYE, PRSI and USC due on an emergency tax basis.


Kind Regards

dbran

ssbob

dbran wrote: »

Treating a person as a subcontractor when they are really employeees will result in substantial interest and penalties as well as having to pay all of the unpaid PAYE, PRSI and USC due on an emergency tax basis.


Kind Regards

dbran

I don't think this is true for Colms query, his company will be performing research in the agrifood sector, so in my opinion he would be entitled to take people on as subcontractors for each bit of research. This also gives Colm the option of ringing these subcontractors when he has no work for them, leaving them fend for themselves ie. not employees. This is very common in Ireland.

newmug

Dont you also have to offer your employees / subcontractors the option of paying into a pension for them?

ssbob

newmug wrote: »

Dont you also have to offer your employees / subcontractors the option of paying into a pension for them?

Subcontractors= No
Employees= You have to offer them the facaility of a pension but you don't need to contribute anything to it. It's up to you whether or not you want to do that.

dbran

ssbob wrote: »

I don't think this is true for Colms query, his company will be performing research in the agrifood sector, so in my opinion he would be entitled to take people on as subcontractors for each bit of research. This also gives Colm the option of ringing these subcontractors when he has no work for them, leaving them fend for themselves ie. not employees. This is very common in Ireland.

Hi ssbob

It dosen't matter what industry you are in. If they work set hours, do not partake in the risks or rewards of the operation, do not provide there own materials, dont have the ability to subcontract the work, etc, they are employees and not subcontractors.

What it comes down to is the actual facts of the case. It is a grey area for sure, but if you get it wrong you will be skinned.

Kind Regards

dbran

Mr Clonfadda

HI OP

You can Download Quickpay 5 for free from Sage's website. It is relatively easy to run a payroll but for about 100 euros you can get support with that.

Regards

HarvestAnne

Irishkid wrote: »

Hi All,

if I open a branch office in Ireland, is there something special you need to take into consideration when paying salaries for example? I would be starting off with one or two people so I am wondering if this is an overly complex thing accountancy wise, for example, would I need an accountant? FOr example how do I create a payslip?, Can I just pay them an amount then they pay all the tax, social sec themselves?

Cheers

Colm

Hi
Along with arranging the salary payments, you will also have to ensure you are submitting the correct forms to the Revenue and meeting the various legislative requirements such a calculating and paying the correct holiday and public holiday entitlements, Benefit In Kind if you are paying for a company car, private health care etc.

If you are paying expenses to them to cover travel or meals etc, you need to ensure you are doing it in the most tax efficient way possible.

If you have the local knowledge, then that's fine but if you expect that any software will do this for you, I'm afraid you're in for a disappointment. Would it not be worth considering having someone do it from Ireland for you and save yourself the hassle? That way, you'll have no worries about it being incorrect or having the authorities on your back. There are lots of companies who do that sort of thing. It could turn out to be the cheapest option for you in the long run.