[Updated 8/21/23] Ireland has very few mandatory employee benefits. There are many state-funded benefits that cover public medical services, basic state pensions, short and long-term disability support, and an assortment of leaves, including both maternity and paternity leave. Common supplementary employee benefits in Ireland include group life insurance (death-in-service schemes), group income protection, private medical insurance, dental insurance plans, and a variety of supplemental company pension schemes. Typical perks include subsidized food, additional paid leave, commuter benefits, gym memberships, and cycle-to-work schemes.
Mandatory employee benefits in Ireland (employer-sponsored)
- PRSA Facility – All employers in Ireland must provide access to a Personal Retirement Savings Account (PRSA) Facility to any excluded employees. Excluded employees are those not offered an occupational pension scheme membership within 6 months of joining service/employment. The employer is not required to contribute to the PRSA currently. However, they must facilitate the arrangement of a PRSA for any staff who wish to contribute to their own retirement and provide tax relief at source via their payroll.
Supplementary employee benefits in Ireland
- Group Life Assurance / Death-in-Service Schemes – Many employers would provide this benefit as it tends to be one of the most cost-effective, there is no tax implication for the employee on the premiums paid to approved plans, and it is of significant value as a protective measure should an employee pass away and leave their financial dependents burdened by debt or considerable loss of household income. The sum will generally depend on the sector; 4 x base salary would be considered a good benefit level. These schemes are established under trust, and the benefit can potentially pay out quickly and outside of probate.
- Group Income Protection –Less common than group life assurance, primarily due to higher premium cost, this benefit is extremely meaningful as a means of providing a replacement income for employees who are long-term ill or disabled and unable to continue in their role. Insurers/Carriers will insure up to 75% of salary (including the state disability benefit). Employees serve a deferred period before claims payments commence; most commonly 26 weeks, this can be extended to 1 year and shortened to 13 weeks, which reduces or increases premium costs respectively. Ordinary employer and employee pension contributions can also be insured, as well as the cost of group life assurance premiums for the absent employee. Payments can continue up until retirement age when the employee remains verifiably unwell and unable to return to their role. There is no tax implication on premiums for the employee for approved plans. However, the benefit paid under a claim is taxable as income via payroll.
- Group Medical & Dental – Private medical Insurance remains one of the most popular benefits when paid partially or in full by the employer. Premiums paid by the employer on behalf of the employee are subject to taxation as a Benefit-In-Kind. There are 3 providers in the Irish Market Place and over 300 plans; at a company plan level, there are 3-6 plans per provider that are common to the employer-paid plan market that includes an EAP service, digital/online doctor and good coverage for in-patient hospital stays, day case procedures, consultants’ visits and day to day benefits such as visits to GPs (family doctors), physiotherapists and other practitioners. Dental insurance is available in Ireland but is far less common and generally a paid benefit offered to employees where an overseas parent company seeks to harmonize benefits with a home jurisdiction. Interest in this benefit has been slowly growing with domestic companies in recent years. Dental is also subject to benefit-in-kind taxation. Providing wellness programs from these providers is an ancillary benefit of having a group scheme, and app-based mental and physical fitness can underpin and support an overall employer wellness strategy.
- Occupational Pensions / Group PRSA / Group and Individual Pensions under a Master Trust – For employers that do contribute to a pension for employees, there are several structures available and the selection of which can depend on many factors, including the business’ structure, number of employees and headcount growth projection, remuneration, and recruitment strategies, parent company practices in other jurisdictions and industry benchmarking. Across all sectors, for employers that do offer a pension with an employer contribution, the average level is 6%, with an ordinary employee’s 5% contribution. Additional employee voluntary contributions are also possible up to revenue age-related contribution limits.
All of these insured benefits will help attract and retain staff, and Aston Lark can assist you in determining the right benefits package for your employees in Ireland and achieving your long-term employee recruitment and retention goals.
- Subsidized Food / Social Committees and Events – This can include everything from vending machines to juice and smoothie bars, baristas and coffee docks, onsite restaurants/canteen facilities, and alcoholic beverages at week’s end or to mark special occasions. Sponsored events/work nights out and charity events are popular.
- Additional Paid Leave – The ability to trade other benefits in exchange for an extra day’s paid leave and other flexible working arrangements remains popular.
- Tax-Saver Commuter Benefits – The employer pre-purchases a monthly or annual bus/tram/rail ticket, and the employee repays the cost from their pre-tax salary, saving up to 52% on the standard cost. The scheme can be operated in-house through payroll or a third-party benefits vendor.
- Subsidized Gym Membership / Fitness Supports / Sports Committees – Large employers may have gym facilities onsite, partner with a local gym, or offer discounted gym membership through third-party benefit providers. They may also provide yoga/Pilates classes onsite weekly, coupled with the formation of regular cycling, running, and walking events (step challenges), tag rugby, soccer, and GAA (hurling, football) teams.
- The Cycle-To-Work Scheme – The employer pre-purchases bicycles and related safety equipment to a value of up to €1,250 or €1,500 for an e-bike, and the employee repays the cost from their pre-tax salary, saving up to 52% of the typical cost. The scheme can be operated in-house through payroll or a third-party provider. It has proven to be hugely popular.
State-funded employee benefits in Ireland
- Death Benefits / Widow / Widower’s Pension (Contributory) – A spouse’s pension is payable to the widow/widower if the contribution conditions are met on either the late spouse’s pay-related social insurance (PRSI) or the surviving spouse’s own PRSI record at the date of death. The two PRSI records may not be amalgamated in order to qualify.
- Illness Benefit – A person may qualify for the State Illness Benefit if they cannot work due to a medical practitioner-certified illness. The person must be under 66 and have been making social insurance contributions (PRSI). Employers must now pay limited sick pay in Ireland at 70% of regular pay (up to a maximum of €110 a day) for up to 3 days in 2022, increasing to 10 days by 2026.
- Invalidity Pension – A state invalidity pension is available to insured persons incapable of working for at least 12 months and satisfying the contribution conditions instead of a flat rate illness benefit. Usually, before qualifying for an invalidity pension, an insured person will have received illness benefits for at least 12 months.
- Public Health Services – Any person ordinarily residing in the Republic of Ireland can access the public health system and, depending on their income level, will have to pay to a certain level for this or be eligible for fully state-funded care. An extensive network of private hospital care is available through self-pay or private medical insurance (or a combination of the two).
- The State Pension – An applicant must be aged 66, commenced paying social insurance before age 56, and meet the requisite number of social insurance contributions paid over their working life and other specified criteria.
- Maternity Benefit – Maternity benefit is a payment for employed and self-employed women who satisfy certain PRSI (Pay Related Social Insurance) contribution conditions on their insurance record. Maternity benefit is typically payable for 26 weeks. Employers are not required to supplement this, although many do.
- Leave Periods – There are several leave periods permitted in Ireland and enshrined in legislation in addition to standard annual leave. We include some links to these below for reference:
- Maternity leave: (as above)
- Parental leave: Gives parents the right to take 26 weeks unpaid leave from work to look after their children aged under 12
- Paternity leave: New parents (other than the mother of the child) can take 2 weeks’ leave in the first 6 months after the baby is born or adopted
- Parent’s leave: Each parent is entitled to 7 weeks paid parent’s leave during the first 2 years of a child’s life, or in the case of adoption, within 2 years of the child’s placement with the family.
- Adoptive leave: For men adopting alone and adoptive mothers
- Force majeure leave: For people who need to take time off work urgently because of an injury or illness of a close family member
- Carer’s leave: For people who need to take time off work to provide full-time care for someone who needs it.
- Sick leave: A new entitlement to paid sick leave of 3 days a year, paid at 70% of standard pay up to a maximum of €110 a day.
State-funded benefits are subject to change in line with newly introduced legislation. We recommend consulting with a local HR consultant and governmental information sources for the most recent information.
This information about employee benefits in Ireland is provided by Aston Lark, Asinta’s employee benefits consulting Partner in the country. If yo need support with employee benefits in the country, please contact Asinta, and we will put you in touch with the experts at Aston Lark.