Foreign Earnings Deduction in Ireland: Revenue Guide for Employers and Employees

The foreign earnings deduction (FED) is an Irish income tax relief for people who work abroad in certain listed countries for part of the year. If your business sends staff to markets such as those on Revenue's list, or you are an employee being sent there, the key questions are who qualifies, how days are counted, and who actually claims. In short, the employee claims FED through their own income tax return, but employers in Dublin and elsewhere still run payroll, so it helps to understand how the relief fits around PAYE obligations for employers.

This guide explains the concepts in outline, based on Revenue's own guidance. It deliberately avoids working through calculations for individual cases. Figures and country lists are changed by Finance Acts and Revenue updates, so check the Revenue pages on the day you rely on them.

What FED is

According to Revenue's Tax and Duty Manual on FED (Part 34-00-09, which shows "Document last updated March 2026"), the relief deducts a "specified amount" from income from an office or employment that is earned while working in certain "relevant states". It was introduced by the Finance Act 2012. It is a relief against income tax only. The manual states that the emoluments disregarded for income tax purposes are not exempt from the charge to USC or PRSI, so an employee who qualifies for FED still has USC and PRSI to consider.

Revenue published an eBrief (No. 046/26, dated 10 March 2026) saying the manual had been updated to reflect Finance Act 2025. It consolidates the core definitions, includes a table of relevant states, reflects the revised test for a qualifying day that applies from 2026, and moves the worked examples to an appendix.

Who can qualify

Revenue's "Who qualifies for FED?" page (last updated 16 June 2026) says the employee must work in a relevant state for at least 30 qualifying days, either within one tax year or within a continuous 12-month period that spans two tax years. The manual adds that the individual must be resident in the State for tax purposes and be a director or employee in the private sector or the commercial semi-State sector.

The Revenue page lists people who cannot claim, including:

• civil and public servants;
• people who receive key employee R&D relief, Transborder Workers' Relief or Special Assignee Relief Programme relief;
• people taxed under the split-year residence rules; and
• people whose income is chargeable on the remittance basis.

Because the relief depends on being resident in the State, the starting point is residence. Our post on tax residency in Ireland explains how residence is looked at, and it is worth settling that question before anyone assumes FED applies.

Relevant states

FED applies only to work in the countries Revenue lists as "relevant states", and the list is tied to dates. The Revenue page groups them by the date they became relevant. It lists, for example, Brazil, India, China and South Africa without a start date, and shows later additions in stages, with the Philippines and Türkiye added from 1 January 2026. The page also shows Russia as a relevant state for 2012 to 2025 only. The manual contains its own table of relevant states by year range.

The practical point is that a country can be on the list for some years and not others. Do not rely on a list remembered from an earlier year. Check the current table for the specific tax year in question.

How the days test works

A qualifying day is one the whole of which is spent in a relevant state performing the duties of the employment. A day can only be counted once, and Revenue's page says weekends and public holidays can count; the manual adds that this is where the day is an unavoidable part of a business trip there. Travel time to or from a relevant state is generally treated as time spent there, according to the manual.

The test for what makes a day count has changed over time, and the Revenue sources describe the periods slightly differently:

• The manual says that for 2022 to 2025, a qualifying day must be part of at least three consecutive days in the relevant state, and that this requirement does not apply for 2026 to 2030.
• The "Who qualifies" page states the three-consecutive-days rule as applying to 2015 to 2025.

This guide asserts neither as the correct start year for the older period. If you are looking at a claim for an earlier year, check the Revenue manual edition for that year, and confirm the position with Revenue or your tax adviser.

For 2026 to 2030, the manual says the employee's presence in the relevant state must be "reasonably required" for the duties, and that working remotely from a relevant state for lifestyle reasons does not qualify. It also says a day is not excluded merely because the work could technically have been done remotely. The Revenue web page puts the same idea more simply: a day counts if the employee is there for business reasons connected to their work. Both describe a business-purpose test, so employers should keep evidence of why the travel was needed.

The 12-month period

Both Revenue sources allow days to be counted across a continuous 12-month period spanning two tax years. Revenue's example is an employee with 15 qualifying days from June to December 2024 and 30 from January to May 2025: 45 days across a 12-month period, with the relief claimed as 15 days for 2024 and 30 days for 2025. The manual says the relief is calculated on the income of the claim year.

How the deduction is worked out

The manual says the specified amount is calculated by reference to the qualifying days, the relevant employment income and a divisor, with foreign tax paid on the same income reducing the amount. The manual also sets a maximum on the specified amount, and the maximum differs between the 2022 to 2025 period and the 2026 to 2030 period. As shown in the manual at the time of writing, the figure is higher for 2026 to 2030. This guide does not reproduce the calculation or the caps because they are the part most likely to change, so work from the current manual.

How and when to claim

Revenue's "How do you apply for FED?" page (last updated 16 June 2026) says the deduction is claimed through the employee's Income Tax Return. It says claims must be made within four years and gives the example that a 2024 claim can be made until 31 December 2028. It also says to keep FED records for six years. The manual makes the same points about the income tax return and six-year record keeping.

That page does not mention any role for the employer in the claim. The manual likewise does not set out separate employer obligations, although its examples describe the employer's policies and the business reason for the travel.

What employers should think about

Revenue's page on Irish employment carried out outside the State (last updated 16 September 2026) says an employee "may be entitled to claim FED if they spend a period of time working abroad", and does not set out the conditions. That page also deals with PAYE exclusion orders, how to treat resident employees with duties in Ireland and abroad, and the position of directors of Irish companies. In the case of resident employees with duties in Ireland and abroad, the page says income tax and USC should be deducted on all income, and the employee may face double taxation and can claim relief for foreign tax.

In other words, FED does not change the payroll deduction rules by itself. The relief is a claim made later by the employee. Where an employee is travelling for work, a few practical steps can help. These are our suggestions, not requirements:

• Our suggestion: keep a simple travel log recording dates, destination, and the business reason for each trip.
• Our suggestion: keep copies of itineraries, client agreements or meeting records that support the business purpose, especially for 2026 onwards.
• Our suggestion: tell employees early that FED is claimed personally, so they can speak to their own tax adviser.
• Our suggestion: where an employee also receives employer-provided items abroad, such as accommodation or flights, consider the tax treatment of those separately. Our guide to benefit in kind for employers is a starting point.

What this guide does not cover

This guide does not cover double taxation agreements, social security coverage abroad, the Special Assignee Relief Programme, or the interaction with other reliefs in detail. It does not give an amount of relief for any particular case. For a specific situation, use Revenue's current pages or take professional advice.

Learnsignal's offices are off Baggot Street in Dublin, and we offer in-person training from there. For current details, see our CPD pages.

Frequently asked questions

Does the employer or the employee claim FED?

According to Revenue's guidance, the deduction is claimed by the individual through their Income Tax Return. Revenue's application page does not describe an employer role in the claim.

Does FED remove USC and PRSI?

No. The Revenue manual states that the income disregarded for income tax purposes is not exempt from USC or PRSI.

Is every overseas country covered?

No. Only the countries Revenue lists as relevant states, and the list is tied to start dates. Check the current table for the tax year concerned.

How long do employees have to claim?

Revenue's application page says claims must be made within four years, with the 2024 tax year claimable until 31 December 2028 as its example. Rules can change, so check the page on the day.

Do public servants qualify?

Revenue's "Who qualifies" page lists civil and public servants among those who cannot claim FED.

FED is an employee-side relief, but a clear travel record helps both sides. For the latest position, always go back to Revenue's FED pages and the Tax and Duty Manual.