Revenue has recently published new guidelines on determining the employment status of workers for tax purposes following the Supreme Court's finding in the "Domino's" case.

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Revenue has recently published new guidelines on determining the employment status of workers for tax purposes.

The guidance comes following the Supreme Court judgement issued in October 2023 in the case of Revenue Commissioners v Karshan (Midlands Ltd) trading as “Dominos” which found that delivery drivers should be treated as employees rather than self-employed.

In the Domino’s Case, the Supreme Court analysed the numerous tests that have been developed in English and Irish case law in considering whether an employment relationship exists. The Supreme Court found that Domino’s delivery drivers should be classed as employees rather than as independent contractors.


Under the judgment, the Courts developed a five-step decision-making framework to be followed in determining an individual’s employment status – whether one of service (employee) or for service (self-employed).

The five steps are:

  1. Does the contract involve the exchange of a wage or other remuneration for the work provided?
  2. If so, is the agreement one pursuant to which the worker is agreeing to provide their own services and not those of a third party to the employer?
  3. If so, does the employer exercise sufficient control over the individual to render the agreement one that is capable of being an employment agreement?
  4. If tests 1 – 3 are met, the decision maker must determine whether the terms of the contract and the actual working arrangements are consistent with an employment contract?
  5. Finally, is there anything in any legislative regime under consideration that requires the Court to adjust or supplement any of the foregoing?

The first three questions set out above operate as a filter, and if any of these are answered in the negative there can be no contract of employment and the individual should not be treated as an employee.

Where each of the first three questions is answered in the affirmative, then sections 4 and 5 of the framework must be considered.


The new guidance provides examples of how the decision-making framework applies to various sectors and scenarios, such as construction, media, public sector, platform operators, provision of workers through a company or an employment agency, part-time, casual and seasonal workers, workers engaged in a domestic setting, couriers, and other transport providers. This is a helpful guide for employers, but sectors and scenarios should be reviewed on a case-by-case basis as the circumstances may vary.


The five-step framework applies for taxation purposes only. In its guidance, Revenue clearly states that the responsibility for determination of employment status of a worker for PRSI purposes lies with the Department of Social Protection (DSP) and matters relating to employment rights are the responsibility of the Workplace Relations Commission (WRC).

The judgement does not change the tax position for businesses which engage companies to carry out work on their behalf or the treatment of services provided through personal service companies. Revenue will not look through corporate structures except in very limited circumstances.

An agreement can be expressed in writing or orally. The terms of a written contract cannot be relied upon solely to determine employment status, the facts and circumstances of each case must be reviewed i.e. consideration of what the contract states is to be done versus what is actually happening day to day.

If a Revenue query arises, it expects an employer to provide an analysis of the application of the five-step framework to demonstrate why an individual has been treated as a self-employed.


Should an individual be misclassified as self-employed rather than an employee, it is open to Revenue to seek payment of un-remitted payroll taxes, employers PRSI together with interest and penalties.

In some current PAYE audits, Revenue is requesting details of consultants, contractors and in particular consultants/contractors who were previously employees or Directors of the company.

Question 2 of the five-step framework is particularly important. This question relates to what is known as the substitution test and whether the worker can subcontract the work. Where the worker cannot be substituted or can only be substituted from a specific pool of preapproved workers, for example, this test is not met, and the worker should be treated as an employee.

Where businesses have relied on previous adjudications of Deciding Officers of the Department of Social Protection, these cannot be relied upon for determining the correct taxation treatment going forward.


Employers should carry out a comprehensive review to determine employment status. We advise that where it is concluded that an individual is self-employed that a regular review of the arrangements is carried out as the relationship can change over time.

Any business engaging contractors should consider this new guidance and whether it could potentially impact how their workers are treated for tax purposes.


We are available to discuss any concerns you have regarding the new guidelines and can assist with making any determinations where necessary.

DHKN understands that attracting, motivating and retaining key employees is vital to the success of a business. We can help you create and implement tailored tax efficient remuneration packages to attract and incentivise the best staff for your business.

Most of our staff are Chartered Tax Advisers and members of the Irish Tax Institute.

Find out more here about or services supporting employers.

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