Ireland
Complete guide to stock options and RSU taxation in Ireland. Covers the KEEP scheme, income tax, USC, PRSI, capital gains tax, and planning strategies for equity compensation.
Ireland is the European headquarters for many of the world's largest tech companies — Google, Apple, Meta, Microsoft, and Salesforce all have major operations in Dublin. For employees receiving equity compensation, Ireland's tax system offers a mix of high income tax rates but an attractive KEEP scheme for qualifying startup employees.
Overview of Irish Tax System
Ireland taxes employment income through three charges: Income Tax, Universal Social Charge (USC), and Pay-Related Social Insurance (PRSI):
| Charge | Rate | Threshold |
|---|---|---|
| Income Tax | 20% (standard) | Up to €42,000 (single) / €51,000 (married, one earner) |
| Income Tax | 40% (higher) | Above standard threshold |
| USC | 0.5–8% | Graduated bands (see below) |
| PRSI | 4% | Class A employees |
| Employer PRSI | 11.05% | On all earnings |
USC (Universal Social Charge) Rates
| Income Band | USC Rate |
|---|---|
| Up to €12,012 | 0.5% |
| €12,012 – €25,760 | 2% |
| €25,760 – €70,044 | 4% |
| Over €70,044 | 8% |
| Self-employed income over €100,000 | 11% (3% surcharge) |
Combined Effective Marginal Rates
| Income Level | Income Tax | USC | PRSI | Total Marginal Rate |
|---|---|---|---|---|
| Under €42,000 | 20% | 4% | 4% | 28% |
| €42,000 – €70,044 | 40% | 4% | 4% | 48% |
| Over €70,044 | 40% | 8% | 4% | 52% |
RSU Taxation
RSUs are taxed as employment income at vesting through the employer's payroll:
| Event | Tax Treatment | Combined Rate |
|---|---|---|
| Grant | No tax | — |
| Vesting | Employment income: Income Tax + USC + PRSI | Up to 52% |
| Employer PRSI | Employer pays 11.05% on RSU value | Additional employer cost |
| Sale | Capital Gains Tax on appreciation since vesting | 33% |
Important: Employer Reporting
Irish employers must report RSU vestings through Revenue's Enhanced Reporting Requirements (ERR) in real-time. The employer withholds Income Tax, USC, and PRSI at source through payroll.
Stock Option Taxation (Standard)
Under standard rules, stock options are taxed at exercise as employment income:
| Event | Tax Treatment |
|---|---|
| Grant | No tax (if at or above FMV) |
| Exercise | Income Tax + USC on the spread (FMV − strike price) |
| PRSI | 4% employee PRSI on the spread |
| Self-assessment | Employee must file Form RTSO1 within 30 days of exercise |
| Sale | CGT (33%) on appreciation since exercise |
Important: Unlike RSUs, the employee (not the employer) is responsible for paying the tax on stock option exercises via Form RTSO1 and self-assessment. The tax is due within 30 days of exercise.
KEEP Scheme (Key Employee Engagement Programme)
The KEEP scheme provides a significant tax benefit for qualifying employees of SMEs — stock option gains are taxed at CGT (33%) instead of income tax (up to 52%):
| Feature | Standard Options | KEEP Options |
|---|---|---|
| Tax at exercise | Income Tax + USC + PRSI (up to 52%) | No tax at exercise |
| Tax at sale | CGT (33%) on post-exercise gain | CGT (33%) on full gain (FMV at sale − strike price) |
| Maximum effective rate | 52% + 33% (two-stage) | 33% (single stage) |
| Tax savings on €100K gain | ~€52,000 at exercise + CGT on further gain | ~€33,000 at sale only |
KEEP Eligibility Requirements
| Requirement | Details |
|---|---|
| Company type | Unquoted SME incorporated in EEA |
| Employee | Must work 30+ hours/week (or 75%+ of working time) for the company |
| Maximum annual grant | €300,000 per employee per year |
| Lifetime cap | €300,000 per employee total |
| Company size | Fewer than 250 employees |
| Company turnover | Under €50M (or under €43M balance sheet) |
| Share class | Must be ordinary shares (no preference shares) |
| Exercise price | Must be at or above FMV at grant date |
| Exercise window | Between 1 year and 10 years from grant |
KEEP Limitations
- KEEP does not apply to RSUs — only stock options
- Company must be trading (not investment or property companies)
- Connected persons (e.g., family members holding 15%+ shares) are excluded
- The option must be granted after January 1, 2018
Capital Gains Tax (CGT)
| Feature | Details |
|---|---|
| Rate | 33% |
| Annual exemption | €1,270 per person |
| Payment dates | Gains in Jan–Nov: due Dec 15; gains in Dec: due Jan 31 |
| Filing | Self-assessed via Form 11 |
CGT applies to the sale of shares acquired through equity compensation:
- RSUs: Gain = sale price − FMV at vesting
- Options (standard): Gain = sale price − FMV at exercise
- Options (KEEP): Gain = sale price − exercise price (full gain at CGT rate)
ESPP Taxation
Employee Share Purchase Plans are less common in Ireland but follow these rules:
| Event | Tax Treatment |
|---|---|
| Purchase at discount | Discount is employment income (Income Tax + USC + PRSI) |
| Sale | CGT (33%) on gain above purchase price |
| Reporting | Employer reports via payroll |
Planning Strategies
- Evaluate KEEP eligibility — if your company qualifies, the savings vs standard options are substantial (52% → 33%)
- File Form RTSO1 within 30 days of exercising standard options — penalties apply for late filing
- Plan for CGT payment dates — December disposals have a different deadline than January–November
- Consider the €1,270 CGT exemption — time sales across tax years to use both spouses' exemptions
- Monitor employer PRSI — this adds 11.05% to the company's cost, which may influence equity plan design
- Coordinate with international tax planning for equity from US or other non-Irish employers
- Track cost basis carefully for RSU and stock option sales
For employees considering relocation, see our guide on moving with equity.
Disclaimer: This guide provides general tax information for educational purposes only. Irish tax law changes annually via the Finance Act. Always consult a qualified Irish tax advisor (Chartered Tax Adviser) before making decisions based on this information. The authors accept no liability for actions taken based on this content.
Last Updated: March 2026 | Research Team: VestingStrategy
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