Update to Irish PAYE obligations for foreign employers

Revenue has recently published an update about the PAYE treatment of foreign employments carried out in Ireland.

Revenue issued guidance in 2018 about what foreign employers must do concerning the above. It also contained rules allowing for foreign employers to dispense with the requirement to operate the PAYE system in certain circumstances.

One of the challenges for employers arising from the 2018 guidance related to the introduction of a multi-year presence test which required employers to track the Irish workdays of its employees over consecutive years when determining its Irish PAYE requirements. In some situations, an international employer was obliged to make annual applications to Revenue for clearance from the requirement to operate PAYE in respect of assignees or short-term business visitors to Ireland.

What has changed?

With effect from 1 January 2020, when determining its requirement to operate the PAYE system, foreign employers are required to only consider the number of workdays spent in Ireland by its employees in a single tax year. In effect, the multi-year presence test no longer applies.

It is understood that the following annual workday thresholds will now be in place from 1 January 2020:

  • 60 workdays if the employee is resident in a country with which Ireland has a Double Taxation Agreement (DTA)
  • 30 workdays in other cases.

This is a welcome development for foreign employers where their employees spend consecutive tax years working in Ireland, as it should simplify the overall review of the PAYE withholding requirements arising from their Irish workdays. However, the updated guidance is silent on whether the nature of the role performed in Ireland also needs to be examined by foreign employers in conjunction with the workday thresholds. Revenue has committed to publishing further guidance on the new rule shortly, which hopefully should address this point.

What should companies consider?

1. Ensure that they continue to track workdays for employees working in Ireland under foreign employments.

2. Understand the nature of the work being carried out in Ireland by each employee.

3. Make an application to Revenue for dispensation from the requirement to PAYE, where required, within 30 days of arrival.

4. Operate Irish PAYE withholding in respect of assignees and business travellers, where required.


If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars employment tax team below:

Staff Member




Ken Killoran

Tax Partner


01 449 4451

John Kelly

Tax Director


01 449 4495

Diana Barton

Tax Manager


01 449 6457


February 2020

Want to know more?



Annual employer reporting for share incentives

Employers who operate share-based reward plans have an obligation to submit an annual return to Revenue providing details of certain share awards in the previous year. Failure to submit the appropriate form can result in a penalty for the employer.


The Reshaping of Ireland’s Transfer Pricing Regime

The Irish Finance Act 2019 (‘the Finance Act 2019’) was signed on 22 December 2019 and has introduced new laws that will reshape Ireland’s Transfer Pricing Regime. The Finance Act has embraced the latest international tax standards which have resulted in a dramatic change in Irish tax law from 1 January 2020.

Download pdf 921.57 kB


Legislation changes and Revenue clarifications

There have been recent changes to Ireland’s dividend withholding regime, with the rate of withholding having increased to 25% with effect from 1 January 2020. The rate of dividend withholding tax is to be brought into line with the individual shareholder’s marginal tax rate from 1 January 2021. Revenue have also released updated guidance on the tax treatment of accruals and provisions made for financial statement purposes.