What is PAYE in Ireland?
Pay As You Earn (PAYE) is the system used by Revenue to collect income tax, Universal Social Charge (USC), and Pay Related Social Insurance (PRSI) directly from your wages. Under this system, your employer calculates and deducts the appropriate amount of tax from each payment before you receive your net pay. The PAYE system ensures that your tax liability is spread evenly across the year rather than being collected as a lump sum. If you are employed in Ireland, you are almost certainly taxed under PAYE unless you are self-employed or a company director.
How PAYE Income Tax is Calculated
Irish income tax under PAYE is calculated using two rates. The standard rate of 20% applies to income up to your rate band, which depends on your personal circumstances. For a single person in 2026, the standard rate band is €44,000. Income above this threshold is taxed at the higher rate of 40%. Your employer applies your tax credits certificate, which Revenue issues based on your personal and PAYE tax credits, to reduce the tax payable each pay period. The combined personal and PAYE credits for a single worker amount to €3,750 per year, directly reducing your tax bill.
PAYE Modernisation and Real-Time Reporting
Since January 2019, Ireland has operated under PAYE Modernisation, which requires employers to report payroll information to Revenue in real time. Every time you are paid, your employer submits a payroll submission to Revenue detailing your gross pay, tax deducted, USC, and PRSI contributions. This means Revenue has up-to-date records of your earnings and deductions throughout the year. Employees can view their payroll details through Revenue's myAccount service, check their tax credits allocation, and request changes such as additional tax credits or increased rate bands for the current year. This real-time system reduces the likelihood of underpayment or overpayment of tax.
Common PAYE Deductions
Beyond income tax, PAYE workers have USC and PRSI deducted from their pay. The USC rates for 2026 range from 0.5% on the first €12,012 up to 8% on income exceeding €70,044. PRSI Class A contributions are charged at 4% of gross earnings and fund social welfare entitlements. Together with income tax, these three components make up your total PAYE deductions. Use our calculator above to see the exact breakdown for your salary, or explore our USC calculator and PRSI calculator for more detailed information on each component.