Steps to hire and pay Ireland contractors legally

Ireland has become one of Europe’s most compelling centers for foreign businesses and remote workers. To date, about 13% of the Irish labor force is self-employed. Among them, over 97% of independent professionals hold a university degree or equivalent qualification and are engaged in high-tech or professional work.

Ireland contractors in high-skilled gig roles earn, on average, 56% more than employees in equivalent positions. This positions Ireland as a sought-after location for companies wanting to tap into specialized skill sets without the weight of long-term employment commitments.

But retaining and paying contractors in Ireland does not come down to a handshake and a bank transfer. You must comply with labor law requirements laid out by the Republic of Ireland, understand contractor vs employee Ireland classification (taking cues from the Domino’s case), select the right payment methods, and properly record contractor invoices and payments.

This guide details the precise steps you must take to hire contractors in Ireland and pay them, while maintaining compliance with both the Revenue Department of the Republic of Ireland and global regulations.

How to hire contractors in Ireland

This section walks you through everything you need to know to confidently hire contractors in Ireland, whether you’re a local business or an international company.

1. Understand worker classification: Contractor vs employee Ireland guide

The 2021 Code of Practice for Determining Employment Status establishes specific guidance and criteria for classifying workers as contractors vs employees in Ireland.

Irish legislation places more importance on the nature of the relationship than the title of the contract. Further, elaborating on it: 

Criteria	Ireland Contractors	Employees
Level of control	Work independently; set own hours	You control tasks, methods, and schedule, limiting up to 48 hours a week.
Integration into the business	Operate separately from the company	Part of the regular business structure
Financial risk and profit opportunity	Can make a profit or a loss	Paid a fixed wage, no personal risk
Exclusivity	May work for multiple clients	Generally exclusive to one employer
Tax handling	Responsible for own taxes and filings	You handle tax deductions and statutory contributions like PAYE, PRSI, USC

Misclassification can result in back taxes, social insurance liabilities, and penalties from Revenue (Irish Tax and Customs) and the Department of Social Protection.

How to classify workers after the landmark 2023 Domino’s case

The 2023 Domino’s Pizza ruling in Ireland served as a wake-up call for companies on how to approach contractor vs employee classification. In that case, a delivery driver at Domino’s, initially brought on as a contractor, was reclassified as an employee by the Tax Appeals Commission, establishing a precedent for future evaluations.

Key takeaways from the Domino’s Case:

• Substantive working conditions trump contract language.
• High degrees of control, including fixed working hours and uniforms, strongly imply employee status.
• The fact that there was a contract with the words “independent contractor” was not sufficient to prevent reclassification.
• The court drew particular attention to the “mutuality of obligation”; if both the employer and employee are obligated to continue working or providing work, it indicates an employment relationship.

Therefore, when hiring Ireland contractors, don’t rely solely on written agreements. Instead, evaluate the day-to-day nature of the engagement. To reduce the risk of misclassification, use a contractor classification checklist and periodically review work arrangements. 

You may also consider independent contractor management/AOR services, such as Payoneer WFM, to stay compliant. 

2. Independent contractor agreement, Ireland: What to know

It is crucial to have a legally compliant independent contractor agreement in place before onboarding them. The agreement should articulate:

• Scope of the work and deliverables
• Payment terms and payment currency
• Deadlines and expectations of work
• Confidentiality and IP provisions
• Termination provisions
• Declaration of non-employment status

The agreement must accurately reflect the actual working arrangement. If it appears in the style of an employment contract, authorities can reclassify the worker as an employee.

3. Find independent contractors in Ireland

You can find experienced Irish contractors in various sectors, including IT, design, finance, marketing, and consulting. Some of the popular platforms and techniques are:

• Freelance websites (e.g., Upwork, Freelancer)
• Professional networks such as LinkedIn or X (previously Twitter)
• Irish local job websites (e.g., IrishJobs.ie)
• Referrals and agencies for Irish contractors

Always do your due diligence; check portfolios, refer to references, and conduct interviews.

4. Hire contractors in Ireland from the US

If you are a U.S. business, you don’t have to establish an Irish legal presence to hire contractors in Ireland. That being said, you must:

• Make sure the contractor is not treated like an employee
• Create a compliant independent contractor agreement
• Employ a secure, legal way to remit international payments
• Obtain the proper tax documentation (e.g., W-8BEN from the contractor if relevant)

How to pay contractors in Ireland

Whether you’re paying in Euros or USD, this guide will help you pay contractors in Ireland accurately and legally.

1. Determine how to pay 

The best payment method depends on where your business is, what Ireland contractors prefer, the currency, and the extent of record-keeping required.

The following are common and compliant methods:

Payment methods	Pros	Cons
SEPA Transfers (for EU-based businesses): If you operate a business within the EEA or EU, SEPA (Single Euro Payments Area) bank transfers are a good way to pay contractors in Ireland.	Low cost per transfer, settles in one business day, and secure	Only allows EUR and needs both parties to have SEPA-compliant bank accounts
SWIFT Transfers (for non-EU businesses, e.g., US-based): For non-EU businesses (e.g., in the U.S.), SWIFT international wire transfers are a classic way of sending money.	Secure and popular	Costlier, longer processing time (3–5 business days), subject to FX exchange
Global Contractor Payment Platforms like Payoneer WFM enable you to pay Ireland contractors without having a local bank account. They provide currency conversion, invoicing, and help you stay compliant.	Contractor gets paid in the desired currency (EUR/USD)	Platforms charge per transaction or FX margins
Marketplace Escrow Payments: When working with Irish contractors through freelance websites like Upwork or Freelancer, payments are generally made through platform escrow mechanisms.	In-built contracts and milestone payments	Platform charges for clients and contractors

2. Ensure your Ireland contractors have the right tax information

Irish contractors’ pay:

• Income tax
• PRSI (4.1%, rising to 4.2% after Oct 2025) 
• Universal Social Charge (USC)—bands range from 0% up to 11% 

Although Ireland contractors handle their filings, U.S. firms should gather tax forms (e.g., W‑8BEN) to avoid withholding errors and IRS reporting issues.

3. Pay in Euros or US Dollars

While Ireland’s currency is the Euro, payment in USD is possible if agreed, though conversion fees apply. Platforms like Payoneer WFM simplify multi-currency payments with competitive forex rates.

As of July 2025, the exchange rate is 1 USD = 0.856 EUR. 

4. Maintain compliant records

You may keep detailed records of the following transactions:

• Signed agreements
• Invoices
• Payment confirmations
• Tax forms and documents
• Work communications

These support compliance and ease potential audits.

When to use independent contractor compliance services

If you are hiring multiple contractors or are unsure if you are in compliance, independent contractor compliance services in the Republic of Ireland are here to help. They lower your risk of legal complications and save time, particularly for cross-border teams. 

These services generally aid with:

• Worker classification
• Contract building and legal review
• Collection of tax documents
• International payment processing
• Compliance tracking and recordkeeping

Why Payoneer WFM is the easiest way to hire contractors in Ireland

Payoneer’s Workforce Management (WFM) platform simplifies every step:

• Hire and onboard contractors from Ireland without setting up a local entity
• Pay in Euros or USD with competitive FX rates
• Automate tax form collection (W-8BEN, etc.)
• Generate contractor agreements
• Stay compliant with Irish laws and Revenue guidelines

Book a demo to learn more!

FAQs on Ireland contractors

Do I require an Irish company to hire contractors in Ireland?

No, you may employ an Irish contractor as a foreign company without setting up a legal entity, provided that the worker is independent. Furthermore, global workforce solutions like Payoneer WFM manage contractor onboarding and payments. 

What taxes do Ireland contractors pay?

They pay income tax, USC, and PRSI under Ireland’s system of self-assessment. You typically have no withholding tax obligation if the classification is proper.

Can I pay Ireland contractors in USD?

Yes, but it should be agreed upon in the contractor agreement. Most people prefer the Euro due to local banking and exchange rates.