Irish employment carried on outside the State
If your employee works for you outside of Ireland, their residence position will dictate their charge to:
A non-resident employee
In certain circumstances, Revenue will issue a Pay As You Earn (PAYE) Exclusion Order. This certificate will authorise you not to deduct Income Tax and USC from your employee where certain conditions are met.
A non-resident employee who carries out some duties in Ireland and some duties abroad
You may deduct Income Tax and USC from your employee only on the portion of the duties exercised in Ireland. However, you are required to obtain prior authorisation in writing from Revenue through MyEnquiries.
You should deduct Income Tax and USC from all of your employee’s income if you do not obtain prior authorisation from Revenue.
A resident employee who carries out some duties in Ireland and some duties abroad
You should deduct Income Tax and USC from all of your employee's income. Your employee may also be liable to pay tax on their employment income abroad. This may result in them paying tax on the same income twice and at the same time. If so, they may be able to claim a credit during the tax year for the non-refundable foreign tax deducted.
You can find out more about claiming this credit on the form Double Deduction 1.
Foreign Earnings Deduction (FED)
Your employee may be entitled to claim FED if they spend a period of time working abroad.
Directors of Irish companies are chargeable to Income Tax and USC in Ireland regardless of their residence position or where the duties of the director are exercised. However, this may be modified by a double tax agreement in place between Ireland and another country.
Pay Related Social Insurance (PRSI) contributions
PRSI contributions may or may not be due when an Irish employment or directorship is carried on outside the State. Further information is available on www.gov.ie