Employer PRSI and total weekly employment cost.
Total weekly employer cost
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Employer PRSI
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PRSI rate applied
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Annual employer PRSI
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Annual total cost
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Your breakdown
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The cliff edge that catches employers
Irish employer PRSI has a structural quirk that often surprises smaller employers. There are two rates: 8.9% for earnings at or below 441 euro per week, and 11.15% for earnings above 441 euro per week. The higher rate does not apply only to the excess above 441 euro. It applies to all of the week’s earnings once the threshold is crossed. That means paying someone 442 euro instead of 441 euro jumps the employer PRSI on the full 442 euro, not just the one extra euro, which is a noticeable increase in cost for a very small pay rise around the threshold.
For most employees earning above the threshold, every euro of gross pay costs the employer about 11.15 extra cent in PRSI on top. A monthly salary of 4,333 euro (1,000 euro a week) costs 111.50 euro a week in employer PRSI, which adds up to 5,798 euro annually on top of the gross salary. Employers setting budgets for headcount often forget to include this, which is why the true cost of a 50,000 euro salary is closer to 55,575 euro before any pension contribution.
Worked example: 1,000 euro a week
At 1,000 euro per week, the threshold is exceeded so the 11.15% rate applies to the whole amount. Employer PRSI is 111.50 euro. The total weekly employment cost is 1,111.50 euro, or 57,798 euro per year. Employee PRSI on the same pay would be 4.1% of 1,000 euro, or 41 euro. The combined PRSI cost to employer and employee together is 152.50 euro per week, representing about 15.25% of gross pay, a significant overhead on the headline salary figure.
What counts as reckonable earnings
Employer PRSI is due on most payments an employee receives: basic pay, overtime, taxable bonuses, commissions, and most taxable benefits-in-kind such as a company car or private medical insurance paid by the employer. Some items are specifically excluded, including certain redundancy payments within the statutory limits, properly vouched subsistence and travel expenses within Revenue approved rates, and employer contributions to a pension scheme (which have their own tax treatment). Getting the correct reckonable earnings figure matters because underpaying employer PRSI creates a liability with interest, and Revenue checks employer returns as part of PAYE compliance reviews.