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Advance notice of PRSI changes for computer users

There were no PRSI changes announced in the October 2014 Budget.

Employee PRSI

There are no changes in employee rates of PRSI.

Self-employed Payments

There are no changes to the rate of self-employed PRSI or in the minimum/flat rate self-employed PRSI payments.

Employer PRSI

There are no changes in employer rates of PRSI.

Income for PRSI purposes

PRSI is calculated on the employee's reckonable pay plus notional pay (or benefit in kind) if applicable.

Share-based Remuneration

  • Employee PRSI only is payable on share-based remuneration. There is no employer PRSI chargeable on share-based remuneration.
  • The obligation to deduct and remit PRSI in respect of share-based remuneration generally rests with the employer. Accordingly the PRSI payable should be deducted by the employer through payroll along with other PRSI liabilities and remitted to the Collector-General with the monthly P30 return.
  • Different arrangements may apply in the case of PRSI on gains from the exercise of certain share options.

For more information, log on to www.welfare.ie and www.revenue.ie (Revenue - Irish Tax & Customs).

Illness Benefit and Occupational Injury Benefit

Illness Benefit and Occupational Injury Benefit are taxable payments. When an employee is absent from work due to illness and receives or is entitled to receive illness or occupational injury benefit, tax is collected through the PAYE system. These benefits are not however subject to PRSI or USC. PRSI should only be charged on the difference between the wages, salary etc., and the amount of the Illness Benefit/Occupational Injuries Benefit received.

General PRSI Information

Maternity Benefit, Adoptive Benefit and Health and Safety Benefit

From 1 July 2013, Maternity Benefit, Adoptive Benefit and Health and Safety Benefit payments are taxable in full. These benefits are exempt from USC and PRSI. Individuals who pay their tax through the PAYE system will, where possible, automatically have their annual tax credits and rate bands reduced by the amount of these payments. Revenue will receive details of the benefit from the Department of Social Protection. Employers will be advised by the Revenue Commissioners of the adjusted tax credits and rate bands on employee tax credit certificates.

Pension Contributions

  • PRSI is fully chargeable on payments by private sector employees in respect of:
    • Superannuation contributions
    • Permanent health benefit schemes (including income continuance schemes)
    • Revenue approved schemes established under irrevocable trusts, overseas pension schemes and other Revenue exempt approved schemes
    • Personal Retirement Savings Account
    • Deductions in respect of Revenue approved retirement funds

Civil and public servants will pay PRSI on the 'Pension levy' portion of their salaries.

  • Civil and public service employers do not have to pay any employer PRSI on the 'Pension levy'.

Employee's Income Thresholds

  • The threshold for employee PRSI remains at €352 a week.
  • Certain public office holders pay PRSI at a rate of 4% on all income, where their income is over €5,200 per annum. They should be returned at Class K1.
  • From 1 January 2013, Class K also applies to the additional earned self-employed income from a trade or profession of a modified rate contributor and on any unearned income they may have.
  • From 1 January 2014, Class K may also apply to the unearned income of employed contributors and occupational pensioners (whether that pension arises from that person's own employment or the employment of his or her spouse or civil partner) aged under 66 years of age where this is the only additional income. This means that unearned income such as rental income, investment income, dividends and interest on deposits and savings may be liable to PRSI.
  • People with a nil liability, such as persons in receipt of occupational pensions should be returned at Class M.
  • For income of more than €500 a week, Subclass A1, A4, B1, C1, D1, H1, J1, or S1 should be returned.
  • PRSI Classes B, C and D will pay PRSI at 0.9% below €1,443 a week and 4% above €1,443 a week.

Employee's PRSI-Free Allowance

There is no employee PRSI-free allowance. Once weekly earnings exceed the threshold at which PRSI is chargeable, PRSI is calculated on all the earnings.

Self-employed PRSI

  • The Class S rate remains at 4% and continues to be payable only on annual income of €5,000 or more.
    The minimum annual contribution for Class S is €500.
  • For those with an annual self-employed income in excess of €5,000 but who have no net liability to tax, the Class S flat rate of payment is €310.

Broadening of the income base on which PRSI is charged

In Budget 2013 it was announced that the income base on which PRSI is charged would be broadened to include sources of income on which PRSI was previously not chargeable. This was implemented in 2 phases.

2013 Changes - Modified Rate Contributors

In 2013, the non-employment income of modified rate employees (Classes B, C and D) became subject to PRSI at 4%.

From 1 January 2013, PRSI is chargeable on all additional non-employment income of modified rate employees, where that employee has earned self-employed income (from a profession or trade) and the tax on that income is collected through the Revenue Commissioner' self-assessed system.

Since 28 June 2013 PRSI is chargeable on all self-employed income of modified rate employees which comes within the PAYE system and is deducted at source.

The PRSI paid is classified for the purposes of recording the contribution under PRSI Class K. Class K contributions do not give entitlement to any social insurance benefits based on the payment of that PRSI charge. Individuals may however qualify separately for social insurance entitlements based on PRSI paid on other sources of income i.e. PRSI paid on income from their employment.

For more information, log on to www.welfare.ie.

2014 Changes - Employees/Pensioners under 66 years with unearned income only

From 1 January 2014, PRSI is chargeable on certain additional unearned income where the individual is:

  • an employee or an occupational pensioner under 66 years (whether that pension arises from that person's own employment or the employment of his or her spouse or civil partner) and
  • where the unearned income is the only additional source of income and it is taxable under the Revenue Commissioners' self-assessed system and
  • the individual is a "chargeable person" for income tax purposes.

Note: This measure will not affect those who have already reached pension age and are therefore exempt from PRSI.

A "chargeable person" for Revenue purposes is generally a person who has income in excess of €3,174. A "chargeable person" does not include a PAYE taxpayer (i) who does not have other income, or (ii) who has an element of other insignificant income that is already fully taxed through the Revenue Commissioners PAYE system. Revenue regard amounts not exceeding €3,174 as insignificant.

The PRSI paid is classified for the purposes of recording the contribution under PRSI Class K. Class K contributions do not give entitlement to any social insurance benefits based on the payment of that PRSI charge. Individuals may however qualify separately for social insurance entitlements based on PRSI paid on other sources of income i.e. PRSI paid on income from their employment.

For more information, log on to www.welfare.ie

Income bands and subclasses

Subclasses

A0

A6, A8, B0, C0, D0 & H0

Weekly

€38 to €352

up to and including €352

Fortnightly

€76 to €704

up to and including €704

Monthly

€165 to €1,525

up to and including €1,525

Note: This threshold only applies to Class A employees, whose total earnings/income, including if appropriate share-based remuneration, in each week of the fortnight or month are at least €38.

 

Subclass

AX

Weekly

€352.01 to €356

Fortnightly

€704.01 to €712

Monthly

€1,525.01 to €1,543

 

Subclass

AL

Weekly

€356.01 to €500

Fortnightly

€712.01 to €1,000

Monthly

€1,543.01 to €2,167

 

Subclasses

A7, BX, CX, DX and HX

A9

JO, M, and SO

Weekly

€352.01 to €500

more than €352

up to and including €500

Fortnightly

€704.01 to €1,000

more than €704

up to and including €1,000

Monthly

€1,525.01 to €2,167

more than €1,525

up to and including €2,167

 

Subclass

A1 and A4

Weekly

more than €500

Fortnightly

more than €1,000

Monthly

more than €2,167

 

Subclass

K1 (Office Holders only)

Weekly

more than €100

Fortnightly

more than €200

Monthly

more than €433

*Note: Class K1 refers to Office Holders only and does not refer to any other Class K contributions paid.

 

PRSI contribution rates from 1 January 2015

Private And Some Public Sector Employments

Non-Cumulative Weekly Earnings Band

PRSI Subclasses

How Much Of Weekly Earnings

Employee %

Employer %

Employee & Employer %

Up to €37.99

JO

ALL

0

0.50

0.50

€38 - €352

AO

ALL

0

8.50

8.50

€352.01 - €356

AX

ALL

4.00

8.50

12.50

€356.01 - €500

AL

ALL

4.00

10.75

14.75

More than €500

A1

ALL

4.00

10.75

14.75

 

Use the following subclasses (A6, A7 and A4) only for existing approved employees under the Employer Job (PRSI) Exemption Scheme.

Non-Cumulative Weekly Earnings Band

PRSI Subclasses

How Much Of Weekly Earnings

Employee %

Employer %

Employee & Employer %

Up to €352

A6

ALL

0

0

0

€352.01 - €500

A7

ALL

4.00

0

4.00

More than €500

A4

ALL

4.00

0

4.00

 

Use the following subclasses for Community Employment participants.

Non-Cumulative Weekly Earnings Band

PRSI Subclasses

How Much Of Weekly Earnings

Employee %

Employer %

Employee & Employer %

Up to €352

A8

ALL

0

0.50

0.50

More than €352

A9

ALL

4.00

0.50

4.50

 

Class J normally relates to people with reckonable earnings of less than €38 a week (from all employments). However, the following employees are insurable at Class J, regardless of earnings: employees aged 66 or over and people in subsidiary employment.

Non-Cumulative Weekly Earnings Band

PRSI Subclasses

How Much Of Weekly Earnings

Employee %

Employer %

Employee & Employer %

Up to €500

J0

ALL

0

0.50

0.50

More than €500

J1

ALL

0

0.50

0.50

FÁS Allowance

J9

ALL

0

0.50

0.50

 

Office Holders

Non-Cumulative Weekly Earnings Band

PRSI Subclasses

How Much Of Weekly Earnings

Employee %

Employer %

Employee & Employer %

Up to €100

M

ALL

0

0

0

More than €100

K1

ALL

4.00

0

4.00

 

Class M relates to people with a nil contribution liability (such as employees under age 16 and persons in receipt of occupational pensions).

Ocupational Pensions

Non-Cumulative Weekly Earnings Band

PRSI Subclasses

How Much Of Weekly Earnings

Employee %

Employer %

Employee & Employer %

All income

M

ALL

0

0

0

 

Public Sector Employments - PRSI Class B

Non-Cumulative Weekly Earnings Band

PRSI Subclasses

How Much Of Weekly Earnings

Employee %

Employer %

Employee & Employer %

Up to €352

B0

All

0

2.01

2.01

€352.01 - €500

BX

All

0.90

2.01

2.91

More than €500

B1

Up to €1,443 inclusive

0.90

2.01

2.91

B1

Balance

4.00

2.01

6.01

 

Public Sector Employments - PRSI Class C

Non-Cumulative Weekly Earnings Band

PRSI Subclasses

How Much Of Weekly Earnings

Employee %

Employer %

Employee & Employer %

Up to €352

C0

All

0

1.85

1.85

€352.01 - €500

CX

All

0.90

1.85

2.75

More than €500

C1

Up to €1,443 inclusive

0.90

1.85

2.75

C1

Balance

4.00

1.85

5.85

 

Public Sector Employments - PRSI Class D

Non-Cumulative Weekly Earnings Band

PRSI Subclasses

How Much Of Weekly Earnings

Employee %

Employer %

Employee & Employer %

Up to €352

D0

All

0

2.35

2.35

€352.01 - €500

DX

All

0.90

2.35

3.25

More than €500

D1

Up to €1,443 inclusive

0.90

2.35

3.25

D1

Balance

4.00

2.35

6.35

 

Public Sector Employments - PRSI Class H

Non-Cumulative Weekly Earnings Band

PRSI Subclasses

How Much Of Weekly Earnings

Employee %

Employer %

Employee & Employer %

Up to €352

H0

All

0

10.05

10.05

€352.01 - €500

HX

All

3.90

10.05

13.95

More than €500

H1

All

3.90

10.05

13.95

 

Self-employed (on PAYE system only) - PRSI Class S

Non-Cumulative Weekly Earnings Band

PRSI Subclasses

How Much Of Weekly Earnings

Employee %

Employer %

Employee & Employer %

Up to €500

S0

All

4.00

0

4.00

More than €500

S1

All

4.00

0

4.00

Note: Share-based remuneration may, in certain circumstances, be subject to employee PRSI. Employers PRSI is not chargeable on share based remuneration.

Important points to note

  • There is no PRSI relief on pension contributions made by private sector employees.
  • PRSI relief on pension contributions paid by private sector employers remains unchanged.
  • Civil and public servants pay PRSI on the 'Pension levy' portion of their salaries.
  • Civil and public service employers do not have to pay any employer PRSI on the 'Pension levy'.
  • Employer and employee PRSI should be added together as normal. If a different subclass applies to the employee and to the employer, the return must always be made at the employee's subclass.
  • There is no annual earnings ceiling for PRSI for employees.
  • Class A employees earning between €38 and €352 inclusive a week should be recorded under Subclass AO.
  • Class A employees earning between €352.01 and €356 a week should be recorded under Subclass AX.
  • Class A employees earning between €356.01 and €500 a week should be recorded under Subclass AL.
  • For income of more than €500 a week, subclasses A1, A4, B1, C1, D1, H1, J1 and S1, as appropriate, should be returned.
  • Community Employment participants earning €352 or less a week should be recorded under Subclass A8. Subclass A9 applies when earnings are more than €352 a week.
  • The Class J contribution normally relates to people with reckonable earnings of less than €38 a week (from all jobs). However, a small number of employees are insurable at Class J, regardless of earnings - for example, employees over age 66 and people in subsidiary employment.
  • For existing employees taken on under the Employer Job (PRSI) Exemption Scheme:
    • Subclass A6 is applied to employees earning €352 or less a week - normally insurable at Subclass AO.
    • Subclass A7 is for those earning between €352.01 and €500 inclusive a week - normally insurable at Subclass AX or AL.
    • Subclass A4 applies for those earning over €500 a week. This applies to employees who would normally be insurable at Subclass A1 and exempted employees who were previously insured at Class A5.
  • You can download PRSI information booklets from our website at www.welfare.ie.

 

Softcom does not accept any responsibility. The above is for reference ONLY. Please consult the relevant Department before making any decisions.

 

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