As an employer, understanding employee benefits is a critical part of your HR and payroll operations. There are two sides to this. On the one hand, there are certain statutory benefits that every employer must provide under Irish law. It’s up to you as the employer to ensure that workers get these benefits as and when required. Businesses face penalties for non-compliance.
On the other hand, in-work benefits form a key part of the remuneration packages that employers put together to attract staff. If you want the best talent, you have to make an attractive offer.
In this short guide, we’ll outline the key things you need to know about employee benefits, both from a compliance perspective and as part of your recruitment strategy.
Statutory benefits: the foundation
Here’s a summary of the key statutory entitlements all workers in employment have under Irish law. The figures relate to full-time employment.
- Minimum wage: As of 1 January 2024, the legal minimum wage for all workers over the age of 20 is €12.70 per hour. Employers that offer alternative forms of pay such as commission, project rates or profit sharing have to be careful they meet this minimum rate as an equivalent.
- Paid Annual Leave: The legal minimum entitlement is 20 days/four weeks. On top of this, workers are entitled to either a paid day off or pay on a public day off for 10 public holidays per year, as long as they have worked 40 hours or more in the five weeks leading up to any given holiday.
- Protective Leave: This category covers a long list of leave entitlements designed to ‘protect’ employee health and well-being. It includes Maternity Leave, which sets a minimum of 26 weeks’ paid leave for new mothers, plus an optional 16 weeks unpaid; Paternity Leave (two weeks); and Parent’s Leave, which allows for up to seven weeks’ paid leave during the first two years of a child’s life.
- Sick Leave: Workers are entitled to five days paid sick leave per year, paid at 70% of your normal pay up to a maximum of €110 a day.
In addition to these statutory entitlements, employers have to be aware of various other mandatory rules, such as the obligation to provide a payslip every time an employee is paid. Payslips must show details of tax and mandatory deductions such as Pay Related Social Insurance (PRSI) on behalf of employees.
Maintaining accurate records of these contributions and employee wages is also crucial to avoid penalties.
Beyond the minimum: building a competitive package
All statutory benefits provide a baseline that employers are obliged to meet. But in the cut and thrust of a competitive labour market, many employers take the view that the bare minimum is not enough when looking to attract suitable workers. It’s therefore far from unusual for businesses to offer more generous in-work benefits like extended holiday and parental leave entitlements, alongside higher salaries, of course.
Beyond that, there are a range of other, non-mandatory benefits that employers can offer if they choose. Some examples include:
- Pension Plans: Offering a company pension plan, though not mandatory, is highly valued by employees and fosters long-term loyalty.
- Health Insurance: Many companies in Ireland subsidize or fully cover private health insurance, a significant perk for employees.
- Work-Life Balance Initiatives: Flexible work arrangements, remote work options, and childcare support programs can significantly enhance employee satisfaction.
Many employee benefits, including statutory pay and leave requirements, plus non-statutory perks like pensions and health insurance, have to be administered through payroll. Getting this essential business function right has to be a priority for any company, though it comes with its own burdens in terms of workload and governance.
Speak to an expert
If you’d like to discuss a way of easing that burden while guaranteeing the accuracy and efficiency of your payroll services through fixed service levels, get in touch with us today to find out about our payroll outsourcing services.
