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Based on queries we have already received from clients and our extensive knowledge, we have created a series of Frequently Asked Questions (FAQ’s) relating to Payment of Wages.

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What is included in the term wages?

Wages means any sum payable to the Employee by the Employer in connection with his/her employment, including:

  • Any fee, bonus or commission;
  • Any holiday, sick or maternity pay;
  • Any other emolument referable to his/her employment, whether payable under contract or otherwise;
  • Any sum payable in lieu of notice on termination.

For the purposes of the Act, the following payments are regarded as wages:

  • Normal basic pay as well as any overtime,
  • Shift allowances or other similar payments,
  • Any fee, bonus or commission,
  • Any holiday, sick or maternity pay,
  • Any other return or payment for work (whether made under the contract of employment or otherwise), and
  • Any sum payable to an Employee in lieu of notice of termination of employment.

The following payments are not regarded as wages:

  • Any payment of expenses incurred by the Employee in carrying out his/her employment;
  • Any payment by way of a pension, allowance or gratuity in connection with the death, retirement or resignation of the Employee or as compensation for loss of office;
  • Any payment referable to the Employee’s redundancy;
  • Any payment to the Employee otherwise than in his/her capacity as an Employee; and
  • Any payment in kind or benefit in kind.
By what method must wages be paid to Employees?

Wages may only be paid by one or more of the methods laid down in the Act:

  • A cheque, draft or other bill of exchange;
  • A credit transfer or other similar method of crediting to the Employees account;
  • A postal, money or paying order, a warrant or any document issued by or drawn on An Post or a document issued by an officer or a government official enabling a person to obtain payment from the Minister of the sum specified;
  • A document issued by a person maintaining an account with the Central Bank of Ireland or a holder of a licence under Section 9 of the Central Bank Act 1971, which enables a person to obtain payment from the bank or the licence holder (see above);
  • A document issued by a person maintaining an account with a trustee savings bank;
  • Cash.

Failure to pay wages by a legal wage method is an offence.

What must Employers do in relation to wage statements?

Under the Payment of Wages Act 1991 all Employees are entitled to a written statement showing the gross amount of wages payable and the nature and amount of any deductions from the gross amount. Employers should ensure that;

  • Reasonable steps are taken to ensure confidentiality of the pay statement;
  • If the payment is made by a credit transfer method, the statement must be given to the employee as soon as possible thereafter.

An accidental or clerical error made in good faith does not invalidate a statement. Failure to give a wage statement of failure to give one at the required time is an offence, and liable on summary conviction to a fine not exceeding €2,500.

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