Employer PRSI cost for a new hire in Ireland after 1 October 2026

What the employer PRSI rate is from 1 October 2026

Employer PRSI is the social insurance contribution an employer pays on top of an employee's gross pay. It is separate from the employee's own PRSI, and it is a cost to the business, not a deduction from wages. For Class A employees, the Citizens Information service states that the rate depends on weekly earnings. Up to 31 December 2025, the employer threshold was €527 per week. It rose to €552 on 1 January 2026, and the Department of Social Protection's advance notice for 2026 gives that same figure. Below the line the employer pays 9% from January 2026; above it the employer pays 11.25%.

The next step is 1 October 2026. Saffery's Irish team and the Citizens Information page both describe the same change: the higher rate moves from 11.25% to 11.40%, and the lower rate moves from 9.00% to 9.15%. The increase is 0.15 percentage points. A 2024 Bill had set the phased path, with the Social Welfare (Miscellaneous Provisions) Act 2024 cited as the legal basis for the 2026 step. The 2024 KPMG note on that Bill described a climb to 11.75% by 1 October 2028.

How the employer PRSI figure is worked out

The calculation is simple once you separate the weeks before and after 1 October 2026. Work through these steps for each new hire.

1. Convert the annual salary to weekly pay. Divide the annual gross by 52 for a weekly salary, or use the actual weekly pay if the contract states it.
2. Check which band the weekly figure falls into. If weekly gross pay is €552 or less, use the lower band. If it is above €552, use the higher band.
3. Pick the rate for the pay period. Use 9.00% or 11.25% for pay dates up to 30 September 2026, and 9.15% or 11.40% for pay dates from 1 October 2026.
4. Multiply the gross pay for that period by the rate. The result is the employer PRSI for that pay run.
5. Add the result to the gross salary to get the total employment cost for PRSI. Other employer costs, such as pension or insurance, are separate.

For a full-year budget, a blended rate is easier to use. Nine months at the old rate and three months at the new rate give the following figures. These figures are worked out from the published rates and assume pay is spread evenly across the year.

One worked example with real numbers

Take two hires starting in the same month. The first is a warehouse coordinator paid €40,000 a year, which is about €769 a week, so the higher band applies. The second is a part-time administrator paid €500 a week, which sits under the €552 line.

For the coordinator, the year's pay of €40,000 divides into nine months at €30,000 and three months at €10,000. Nine months at 11.25% gives €3,375. Three months at 11.40% gives €1,140. The employer PRSI for the year is €4,515, which is the blended rate of about 11.29%. Before October, one week of pay of €769.23 would cost €86.54 in employer PRSI. From October, the same week costs €87.69.

For the administrator, one week of €500 pay costs €45.00 in employer PRSI before 1 October 2026 at 9.00%. From that date the same week costs €45.75 at 9.15%. The increase is small per week, but it runs through every pay run for the year and into any later hire.

Cases that change the answer

The weekly band decides the rate, so a change in pay can move a hire from one band to the other. A rise that takes weekly pay above €552 moves the whole week to the higher rate, and a cut below the line moves it down. Check the weekly figure on each pay run, not only the annual salary.

• Employees earning €352 or less a week do not pay employee PRSI, according to Citizens Information. The employer still pays employer PRSI and the employee is still covered.
• Part-time and casual staff are tested week by week. A person who works three days and earns €400 in one week and €700 in another will fall into different bands across the year.
• Community Employment and JobsPlus participants are handled under different PRSI subclasses. The Department's advance notice says that for JobsPlus participants, the appropriate rates apply to both the employer and the employee.
• Minimum service: the official sources do not set a minimum period of employment before employer PRSI applies. Payroll should confirm the start date and subclass on the first pay run.
• Caps: the official sources describe the rate as a band, not as a capped amount. Citizens Information states that the employer threshold is due to rise to €600 per week in 2027, which would change the banding again.
• Resignation and final pay: the same weekly test applies in the final pay run. The official sources set no separate PRSI rule for resignations, so the last pay run should be checked with payroll.
• Levy included: according to the Law Society of Ireland, the National Training Fund levy is collected together with employer PRSI, so it is already part of the rate.

Common mistakes

The most frequent error is using the old rate for pay dates after 30 September 2026, or the new rate for earlier pay dates. Budgets prepared in early 2026 often carry 11.25% through the whole year. Another common error is applying the €352 employee threshold to the employer. The €352 line affects the employee's own contribution, not the employer's liability.

Owners also deduct employer PRSI from staff pay. Section 13 of the Social Welfare Consolidation Act 2005 makes the employer liable for the employer's contribution, and it bars the employer from recovering that contribution from the employee. The third mistake is working from an annual salary when pay is monthly. Monthly pay can fall in a different band in some months, especially when there are overtime or unpaid weeks.

What to check with HR, payroll or a lawyer

Confirm the current weekly threshold and rates on the Department of Social Protection's PRSI pages and in Revenue's payroll guidance before you set a budget. The Department's 2026 PRSI Contribution Rates and User Guide and its PRSI Employer Guide are the reference documents, and both are linked from the Citizens Information page. Ask payroll to confirm the subclass for each hire, especially for community or subsidised schemes. Check how a mid-month pay change is applied to the week, and whether a new hire's first partial week is banded on its own. Ask your accountant how the 2027 threshold change should be phased into a multi-year hiring plan.

This explains the rule in general terms; it is not legal or tax advice for your case.

Where AI workers fit in payroll and HR

Much of this work is repetitive. An AI worker can be set up to read each new hire's start date, pay frequency and weekly gross from the HR record, apply the rate table for each pay period, and place the employer PRSI line in a payroll report. A person still checks the rate table when the rules change, reviews any pay run that crosses the €552 line, and approves the final figures. The result depends on each business's own pay data, which the free audit measures.