Because of the pandemic, working from home has become the norm for many employed within Ireland. Businesses allowed for workers to be situated abroad and work remotely. There are some tax considerations when doing this for the employer and employee.
Long Term Relocation
Irish workers pay taxes such as PRSI, USC, and Income tax using the PAYE System (Pay as you Earn) but if an employee had relocated to another location long term, the tax requirements of that location may also need to be taken into consideration. If an employee is full-time living in another country, under certain circumstances an employee can be issued a PAYE Exclusion Order which will authorize an employer not to deduct Irish Income Tax and USC. The employer may be required to register as an employer and make deductions under the tax regime of the country in which the employee relocates to. Local tax advice should be sought in this regard
Working from Ireland and Abroad
If your employee works from Ireland and abroad, they are liable to pay USC, Income Tax and PRSI. They may also be liable to pay taxes in the country they also reside in. Local tax advice should be sought in this regard.
Foreign Earnings Deduction
An employee who works more than 30 days abroad (subject to conditions) in selected countries may be entitled to claim for the foreign earnings deduction which is a tax credit whereby an employee’s gross taxable pay is reduced by the qualifying amount.
Variables such as minimum wage, paid leave and public holidays may differ from country to country. This means a company may be obligated to accommodate the requirements in the country the employee relocated to.