Pay As You Earn (PAYE) Exclusion Order issued by Revenue

Note

The information included on this page refers to your current obligations. For your obligations before 1 January 2019, please see the Employers' Guide to PAYE.

If your employee is going to work for you outside Ireland, they may not need to pay Income Tax (IT) in Ireland. A PAYE Exclusion Order is a certificate issued by Revenue. It will authorise you to not deduct PAYE or Universal Social Charge (USC) from payments to an employee.

When can you apply for a PAYE Exclusion Order?

You can apply to us to have a PAYE Exclusion Order issued if all of the following apply:

  • you are an Irish employer
  • your employee carries out all of the duties of their employment abroad
  • your employee will be non-resident in Ireland for tax purposes during the tax year.

Your employee may perform incidental duties of up to 30 days per year in Ireland and still qualify.

You can also look for a PAYE Exclusion Order to be issued if all of the following apply:

  • you are an Irish employer paying an occupational pension to an ex-employee
  • they are non-resident in Ireland for tax purposes during the tax year
  • they are resident in a country with which Ireland has a Double Taxation agreement.

What do you need to send to Revenue?

You will need to send the following information about your employee to Revenue:

What will the PAYE Exclusion Order say?

The PAYE Exclusion Order notifies you to not deduct PAYE and USC from payments to an employee. It may cover a full tax year, or only part of a tax year.

It remains in place as long as your employee works abroad and is non-resident in Ireland for tax purposes.

The Exclusion Order will have an expiry date. You may apply for another (or an extension to the) Exclusion Order if your employee continues to both:

  • work abroad after that date
  • continues to be non-resident.

You are not required to request a Revenue Payroll Notification (RPN) once an exclusion order is in effect. You may operate the exclusion order granted by Revenue. 

Where an application has been made to Revenue but the Exclusion Order has not yet been granted you should request an RPN.

Pay Related Social Insurance (PRSI) where an Exclusion Order is issued

You may still have to deduct employee and employer PRSI from payments to the employee. The Department of Employment Affairs and Social Protection (DEASP) will advise you about this.

Any PRSI deducted from the employee should be included on the payroll submission. You should also include the PRSI class and the number of insurable weeks.

Non-resident directors

Directors of Irish companies must pay tax in Ireland regardless of their residence position or where they carry out their duties.

In general, PAYE Exclusion Orders will not be issued to a non-resident director of an Irish company.

Non-resident employees recruited and working abroad

You do not need to apply for an Exclusion Order, or operate PAYE, for a non-resident employee who:

  • is not resident in Ireland for income tax purposes
  • was recruited abroad
  • carries out all the duties of their employment abroad
  • is not a director of your company
  • has no Income Tax liability in Ireland.

You do not need to include the employee on your payroll submission. You should keep a record of any payments you make to the employee.