Payments to employees

Shadow payroll

Some employers may have dual payroll withholding responsibilities in both Ireland and a foreign jurisdiction. If so, they will often run what is known as a ‘shadow payroll’ in respect of an employee’s taxable income.

Where pay dates in foreign jurisdictions do not align with Irish pay dates, the payroll submission can be aligned with the Irish employer’s next pay date for equivalent Irish employees. 

Calculating Irish work days 

You should provide a best estimate of the number of days an individual works in Ireland. If there are more (or less) days than originally estimated, the pay should be amended in the following payroll submission. 

Applications for the release from the obligation to operate PAYE 

An employer may apply to Revenue and be granted a release from the obligation to operate Pay As You Earn (PAYE). If this application is subsequently rejected, the employer should operate PAYE from that point in time. Revenue will not penalise employers where the original application is made in good faith. 


The above will only apply where there is a clear expectation that the release will be granted. It might be clear that the conditions set out in the employment article (generally Article 15) of the relevant Treaty are unlikely to be met. In this case, the provisions of Chapter 4 of Part 42 of the Taxes Consolidation Act will apply. 


The following procedures will apply: 

  • The employer should include all income paid to the employee from the date an assignment commences. This includes the income from the date PAYE is applied. 
  • The Revenue Payroll Notification (RPN) will operate on a Week 1 basis.