Your profit is the income left after deducting business costs. Here’s how it works:

1. Start with total income
All revenue earned from sales or services.

2. Deduct allowable expenses
Only costs that are wholly and exclusively for your business can be deducted. Examples include:

  • Rent and utilities for business premises
  • Staff wages
  • Materials or supplies
  • Travel for business (not commuting)
  • Accountancy, legal, or marketing fees
  • Business insurance
  • Equipment and tools

3. Apply capital allowances
Large items (like machinery or vehicles) can’t be written off all at once. Instead, claim their cost over several years through capital allowances.

4. Result = Net Profit
This is the figure you’ll be taxed on.

Example:

  • Income: €80,000
  • Expenses: €30,000
  • Capital allowances: €5,000
  • Net profit = €45,000

You’ll then pay:

  • Income Tax: 20% up to €44,000 (single person), 40% above
  • USC: Based on gross income, with a 3% surcharge on income over €100,000
  • PRSI: 4.1% of profit or €650 minimum

FastTax.ie makes it easy to calculate your self-employed profits and generate your Form 11 tax return.