What Is PRSI?
By PayMetric Labs Research Desk
Short answer
PRSI (Pay Related Social Insurance) is Ireland's social insurance contribution, charged at 4.2% on employee earnings in 2026, funding state benefits like the State Pension and jobseeker's payments.
Most employees pay PRSI Class A, currently 4.2% of gross earnings, deducted automatically alongside Income Tax and USC. Employers also pay a separate Employer PRSI contribution on top of your salary (11.05% for most employers in 2026), which is a real cost to them but doesn't come out of your pay.
PRSI contributions build your entitlement to contributory state benefits: the State Pension (Contributory), Jobseeker's Benefit, Illness Benefit, and others are all linked to your PRSI record, which is why it's structured as "insurance" rather than a flat tax, even though it functions like one for most working people.
Contractors pay PRSI differently depending on their structure. Sole traders and directors typically pay Class S (self-employed) PRSI, while PAYE umbrella contractors pay Class A like a standard employee, one of the practical differences between contractor structures that affects both take-home pay and future benefit entitlement.
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This glossary entry is for general information only and does not constitute financial, tax, or legal advice. Rates and thresholds shown reflect current published guidance and may change.