When an employment ends

When an employee retires

If your employee retires you must not notify Revenue that employment has ceased if you: 

  • are paying them a pension
  • and
  • have the same registration number for current and pensioned employees.

The pension should be included on the next payroll submission, and tax and Universal Social Charge (USC) must continue to be deducted or refunded. There may be a change to the Pay Related Social Insurance (PRSI) class used.

Your employee might retire on a pension that is paid:

  • by you, but with a separate registration number
  • or
  • by a trust fund or life assurance company.

In this case, you must notify Revenue by including the cessation date on the payroll submission as normal when your employee leaves. 

Your employee may retire at an age when they might be entitled to claim Jobseeker's Benefit from the Department of Social Protection (DSP). If so, you should give your employee a letter with the information you would normally enter on the final payroll submission. Your employee can give this to their social welfare office.

You might choose to pay a lump sum payment to an employee who is retiring or leaving work. Lump sum payments on redundancy or retirement are eligible for special tax treatment and may be partially, or totally, exempt from Income Tax, PRSI and USC.

Next: When an employee transfers to another branch