Public bodies account for over €6m in unpaid tax from misclassification of workers as contractors

The second most culpable sector was the construction industry, which saw disclosures totalling €5.2m. File photo

Public bodies were responsible for more than €6.2m in unpaid tax for the misclassification of employees as contractors in just two years, according to a new report.

Just under a quarter of voluntary disclosures of bogus self-employment practices made to the Revenue Commissioners in 2024 and 2025 came from entities funded with public money, according to the latest figures.

They were released by Revenue on foot of queries from the Public Accounts Committee about the level of take-up of a voluntary scheme put in place by the agency in response to a 2023 Supreme Court decision in favour of contracted workers.

That decision, the Karshan judgement, declared that Domino’s Pizza drivers should be treated as full employees rather than contractors, and thus entitled to all of the basic advantages of a PAYE employee, including holiday pay and pension contributions.

The figures show that 4,043 workers were misclassified at 51 separate public bodies over the 48-month period at a cost in unpaid taxes — income tax, USC, and PRSI — of €6,230,483.

The process, titled the ‘Karshan Settlement Opportunity’ by Revenue, saw tax obligations worth €26.7m voluntarily disclosed by the employers in question. That figure had been revealed by Revenue chair Niall Cody at a PAC hearing last March.

With public bodies accounting for the largest adjustment by close to €1m, the next most-culpable sector was the construction industry, which saw disclosures totalling €5.2m.

The industries with the greatest number of affected employees were accommodation and food, with close to 4,300 workers at a cost to the Exchequer of €5.1m, the significant majority of which was disclosed in 2024 rather than 2025.

PAC chair and Sinn Féin TD John Brady described the figures as “absolutely alarming” in terms of what he said amounted to “an amnesty process for the misclassification of workers which in effect made them bogusly self-employed".

“We need the full information and a complete breakdown of this amnesty, particularly regarding the publicly funded bodies involved,” Mr Brady said.

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While the sectors behind the settlements are revealed in the new figures, the individual employers have not been. 

Mr Brady said the public “has a right to know which bodies were involved and the scale of the liability involved” with regard to the public bodies in question.

“Rather than effectively benefiting from an amnesty, there must be transparency and accountability. Revenue and the Government should now publish the names of all publicly funded bodies included in this process,” he said.