Payroll Finance Ireland: Funding Weekly Wages While Clients Pay in 60 Days (2026)

Your contractors get paid every Friday. Your client pays you in 45 days, if you're lucky, and closer to 60 if their accounts team is having a month.

If you run a recruitment agency, a staffing business, or a contract cleaning or security firm, you know this gap better than anyone. You're funding your client's workforce out of your own pocket for two months at a time. And the better you do, the worse it gets. Land a big new contract and you need to find another €50,000 of wages before you've been paid a cent for the extra work.

That's what payroll finance (often called payroll funding) is for. It's not a special loan. It's invoice finance set up around a weekly payroll, so the cash from each week's invoices lands in time for the next payday. In this guide we'll walk through how it works in Ireland, how PAYE Modernisation changes the timing, what it costs on real numbers, and what lenders need to see from an agency before they'll fund it.

Why Staffing Businesses Hit a Payroll Cash Gap

Most businesses buy stock and then sell it. Agencies and contract service firms sell people's time, and they pay for it before they're paid for it. Every week.

Here's how the cycle runs. Your workers do the shifts. Timesheets get approved. You invoice the client, weekly if you're smart, monthly if you're not. Your workers get paid on Friday. Then you wait 30, 45 or 60 days for the client to pay, and in the meantime you've run another six or eight payrolls.

The gap grows in step with your success. A new contract with a hospital group or a logistics firm can add tens of thousands a week to your wage bill overnight. Your overdraft was set based on last year's accounts. It doesn't know you just doubled.

That's the moment agencies either turn down work they should be winning, or end up paying people late. Neither is a business you want to run.

How Payroll Finance Works Through Invoice Finance

Payroll finance is a version of invoice finance built around a weekly cycle. Here's how it works in practice:

1. Your workers submit timesheets and your client approves them.
2. You raise the invoice and upload it to your finance provider.
3. The provider advances typically 80 to 90% of the invoice into your account, quickly enough to fund that week's payroll.
4. When your client pays, the provider releases the rest, minus fees.

Some specialist recruitment funders go further and bundle in back-office support: running your payroll, raising invoices from timesheets and handling the paperwork. That suits a small agency without a finance team. A bigger agency with its own payroll staff usually wants the funding alone, on a confidential basis. If that's you, our guide to confidential invoice discounting explains how to keep the facility invisible to your clients.

The key word in all of this is approved. Lenders fund invoices backed by client-signed timesheets. An invoice for hours the client hasn't confirmed isn't fundable, and a disputed timesheet can hold up a whole week's advance. Tight timesheet discipline isn't admin. It's your cash flow.

PAYE Modernisation and the Timing of Your Revenue Payments

Since PAYE Modernisation came in on 1 January 2019, Irish employers report pay and deductions to Revenue in real time. You submit a payroll submission on or before each payday, showing every worker's pay, PAYE, PRSI and USC.

Revenue then pulls your submissions together into a monthly statement. You pay the total by the 14th of the following month, or by the 23rd if you pay and file through ROS.

So what does that mean for a weekly payroll? You pay your workers their net wages every Friday, but the tax you've deducted sits with you for anywhere from three to seven weeks before it goes to Revenue. Add the employer PRSI on top, and on a busy agency that's a large sum sitting in your account.

Here's our blunt advice. That money isn't yours. Don't use it to cover the payroll gap.

Agencies that dip into the Revenue float to make Friday's wages are borrowing from the one creditor that sees everything in real time. Because every payroll submission tells Revenue exactly what you owe, a missed payment is visible straight away. Interest starts running, and once you're behind you can lose your tax clearance. For an agency, that's catastrophic: public sector clients won't pay you without it, and most invoice finance facilities require it as a condition. If you're already behind, read our guide to tax bill finance before it gets worse.

The Real Cost of a Worker in 2026

Before you can size a facility, you need your true weekly cost per worker, not just their hourly rate. In 2026, that stack includes:

• Gross pay, at no less than the €14.15 national minimum wage that applies from 1 January 2026 for adults, and higher where an Employment Regulation Order sets sector rates, as it does in contract cleaning and security.
• Employer PRSI, which went from 11.25% to 11.4% on 1 October 2026 for employees earning over €552 a week, with a lower rate below that threshold.
• Pension auto-enrolment, which started on 1 January 2026. Employers pay 1.5% of gross pay for enrolled workers, and that rate is scheduled to rise in later years.
• Holiday pay, which builds up at 8% of hours worked for most hourly workers, up to the statutory four weeks.

Agency workers in Ireland are also entitled to equal treatment with the client's own staff on basic pay and working conditions under the Temporary Agency Work Act 2012. So you can't quietly squeeze the pay rate to protect your margin. Your margin has to come from your charge rate, which makes your cash flow even more sensitive.

Payroll Funding in Numbers: A Worked Example

Let's run the numbers for a mid-sized agency. Forty contractors, 39 hours a week each, at €18 an hour. The client is charged €26 an hour and pays on 45-day terms, in practice closer to 55 days. VAT is left out to keep it simple.

Now the cash gap. At 55 days to pay, you're carrying about eight weeks of invoices at any time, roughly €325,000. By the time the first invoice is paid, you've already funded around eight payrolls.

With payroll finance advancing 85% of each weekly invoice, you draw about €34,500 a week, which roughly matches the week's employment cost. The gap disappears.

So what does that cost? Say a service fee of 0.75% of turnover (about €15,800) plus a discount fee of around 8% a year on an average drawn balance of €276,000 (about €22,100). That's roughly €37,900 a year, or about 11% of your gross margin. It's real money. But compare it to what you'd earn on the contracts you'd otherwise have to turn down, and for most growing agencies it's an easy call. For a line-by-line look at how fees are built up, see invoice finance costs in Ireland.

Payroll Funding by Sector: Recruitment, Cleaning, Security and Contract Labour

The gap looks different depending on what you supply, so it's worth knowing where yours bites.

Recruitment and healthcare staffing. Nursing and care agencies often supply the HSE and private nursing homes, with night and weekend premiums that change the bill every week. Public sector clients are reliable but slow, so your ledger ages fast. Weekly invoicing on approved timesheets is the single biggest fix.

Contract cleaning and security. This is where we see the widest gaps. You pay staff weekly, but many facilities contracts invoice monthly in arrears, and the client then pays 30 to 60 days after that. Add it up and you can be 90 days out of pocket on the first month's wages. If the contract allows it, push for fortnightly invoicing. And watch contract wins closely: when you take over a cleaning or security contract, transfer of undertakings rules can mean the existing staff move across to you, so the full payroll lands on day one.

Construction labour supply. If you supply labour to contractors, Relevant Contracts Tax (RCT) can apply, and your principal may deduct tax from what they pay you. That shrinks the cash coming in against a payroll that hasn't shrunk at all. Our guide to RCT subcontractor finance covers how lenders handle it.

What Lenders Need to See From an Agency

Staffing is one of the sectors invoice finance lenders like most, as we cover in best industries for invoice finance in Ireland. But they'll still check a few things carefully:

• Your client list and concentration. One client making up 60% of your book is a risk, and lenders will cap how much of it they'll fund.
• Contracts and terms of business. Signed agreements with clients setting out charge rates, payment terms and how timesheets are approved.
• Timesheet process. How hours are captured, approved and turned into invoices. Weekly invoicing on client-signed timesheets is what they want to see.
• Your licence. If you're a recruitment agency, you'll need an employment agency licence under the Employment Agency Act 1971. Have it to hand.
• Revenue compliance. Tax clearance, payroll submissions up to date and no arrears. This is non-negotiable.
• The basics. CRO filings current, a clean Central Credit Register record and recent management accounts.

Public sector clients like the HSE are strong credit but can be slow payers, so expect lenders to apply aged-debt limits even where the debtor is rock solid.

Payroll Finance vs Overdrafts and Loans: Picking the Right Tool

Payroll finance isn't the only way to fund wages. It's just usually the best fit for a business whose costs are mostly people and whose income arrives on invoice.

An overdraft is cheaper and simpler if your gap is small and steady. The problem is it doesn't grow when you win a contract, and banks are slow to raise limits on a fast-growing agency.

A term loan works for a one-off need, like funding the first two months of a big new contract or building a cash buffer that lets you invoice monthly without panic. Our fixed term loans of €30,000 to €300,000 over 12 to 48 months suit exactly that. For a wider look at the options, see our guide to working capital loans in Ireland.

What we'd steer you away from is funding payroll on expensive short-term credit rolled week to week. If your gap is permanent, your funding should be too.

Stop Funding Your Clients' Workforce From Your Own Pocket

Payroll finance in Ireland works because it matches the shape of your business: weekly costs funded from weekly invoices, with a limit that grows when you win work.

Invoice weekly on approved timesheets. Treat Revenue's money as Revenue's. Know your real cost per worker. Do those three things and the next big contract becomes something you can say yes to, not something that keeps you up on a Thursday night.

Frequently Asked Questions