The Government has introduced a series of phased PRSI increases under the Social Welfare (Miscellaneous Provisions) Act 2024, affecting employees, employers and self-employed individuals from 2025 onwards. These changes are designed to support the long-term sustainability of the State Pension and will impact payroll, employer cost planning and self-assessment calculations over the coming years.

Are you aware of the upcoming increases to PRSI contributions?

Class A PRSI, which covers most employed persons, will increase from 4.10% to 4.20% employee rate.

The employer rate will increase from 11.15% to 11.25% and from 8.9% to 9% where weekly income is €496 or less.

Class S PRSI, which covers self-employed people, including certain company directors, will increase from 4.10% to 4.20%.

Over the next four years, Irish businesses will see a significant transformation in payroll regulations, systems, and compliance obligations. From SEPA file updates to pension auto-enrolment and gender pay gap reporting, employers need to act now to prepare for what’s coming.

The payroll landscape is changing rapidly. From AI to international compliance, staying ahead requires continuous learning and adaptation. That’s exactly what our team experienced at the Annual Payroll Conference & Exhibition 2025, held on 16 May, a single day packed with practical updates and strategic insights.

Recognizing and rewarding employees is key to fostering a positive and productive workplace. While cash bonuses are a common way to show appreciation, they often lose impact due to tax deductions. The Small Benefit Exemption Scheme provides a smarter alternative—allowing businesses to reward staff with tax-free benefits.

The 2025 tax year introduces a variety of changes that employers need to be aware of to stay compliant and manage their payroll processes effectively. While some updates provide tax relief, others bring new responsibilities.