The State of Hospitality Payroll in Ireland

In Ireland, the hospitality sector has worked well to recover and create new tourism initiatives. Alongside increases to the cost of living, the cost of hotel accommodation and hospitality has put the sector in a challenging position.  

Since January 2026, the National Minimum wage increased to €14.15 for all workers over the age of 20. This has impacted hotels and hospitality, many of whom would employ a staff base at this wage rate. 

On 7 October 2025, the Irish 2026 Budget confirmed that the VAT rate on food, catering and hairdressing services will be reduced from 13.5% to 9% permanently. Announced in the 2026 Budget, this measure reintroduces the COVID-era tax relief to support restaurants, cafés, catering businesses, and hairdressers. Staying compliant is crucial, and leveraging technology that automatically updates VAT rates in invoices and returns will help businesses adapt seamlessly. 

January 2026 introduced auto-enrolment pensions for the first time in Ireland, adding new compliance obligations for employers. 

With this insight from our HR and Payroll Pulse 2025, it’s clear that 2026 onward will bring great changes to the industry with the advent of My Future Fund, pension auto-enrolment. Ireland introduced mandatory pension auto-enrolment for employees aged 23 to 60 earning €20,000 or more per year. Businesses across the sector will have to work efficiently to avoid penalties. 

Frequent updates to PRSI contribution rates and evolving holiday pay rules create additional complexity. 

Calculating entitlements for part-time and seasonal staff under Irish law is particularly challenging, especially when factoring in variable hours, split shifts, and tips. A single miscalculation can lead to Revenue penalties or WRC disputes, putting your reputation and finances at risk. Without automation, these compliance tasks consume valuable time and increase the likelihood of costly errors

In a sector where turnover is high and competition for talent is fierce, accurate and timely pay is one of the most powerful tools for retention. When employees know they’ll be paid correctly every time, morale improves, engagement rises, and service quality follows. Conversely, payroll errors erode confidence and push staff out the door, increasing recruitment costs and impacting on guest and customer experience. 

By streamlining payroll and integrating it with time and attendance systems, hotels and hospitality businesses can reduce admin, control labour costs, and create a workplace where employees feel valued - driving profitability from the inside out.