If you’re earning income under the PAYE system in Ireland, you may still have tax questions — especially if you have additional income or are unsure about refunds or credits. This section answers the most common PAYE tax questions with simple, clear explanations.
PAYE (Pay As You Earn) is tax deducted from your salary / pension by either employers or pension providers.
A P60 is an annual statement of the amount of PAYE and PRSI deducted by an employer or pension provider. As part of PAYE modernisation, P45s and P60s have been abolished and replaced with an online system. An Employment Detail Summary will be available to you through Revenue’s myAccount service.
A P45 is given to an employee on cessation of employment. As part of PAYE modernisation, P45s and P60s have been abolished and replaced with an online system. An Employment Detail Summary will be available to you through Revenue’s myAccount service.
A PRD 60 is an annual statement of the amount of pension levy paid by a public sector worker.
A P50 form is used to claim a tax and USC refund during the year if you are unemployed.
A certificate of tax credits is a certificate that is received annually from the Revenue Commissioners outlining an employee’s tax credits and income taxable at 20%.
The amount of income taxable at 20% is indicated by the standard rate cut-off point which is included on the certificate of tax credits. For a single person it is €35,300 for 2020.
Under joint assessment where both spouses have an income for 2020 one can earn up to €44,300 taxed at 20 % and the other €26,300 taxed at 20%
A PAYE credit is a special tax credit worth €1,650 that employees are entitled to.
Proprietary directors (directors owning more than 15% of the company) are not entitled to the PAYE credit in respect of salary from their own company. However, you are entitled to the Earned Income tax credit of €1,500 for 2020.
Yes PAYE must still be deducted from your salary even if you own the company which is paying you.
Yes if you have PAYE source income.
You are entitled to the age credit if you are aged 65 or over in the tax year. It is worth €245 for a single person and €490 for a married couple.
Exemption limits apply for age 65 and over. If your PAYE income is less than the exemption limit and you obtain an exemption certificate from Revenue then PAYE will not be deducted from your income. The income limit for 2020 is €18,000 for a single person and €36,000 for a married couple.
These are special tax allowances to cover employee expenses for certain categories of employees. A full list of the qualifying employments and amount of expenses claim is available on our website.
PRSI (Pay-Related Social Insurance) is additional tax deducted to fund social welfare and health benefits.
Most employees pay Class A although some shareholder directors may pay Class S.
Class A PRSI is payable at 4%. No PRSI is payable for weekly earnings under €353 .For employees on Class S, the salary is taxed at 4% subject to a minimum payment of €500.
Yes persons aged 66 and over are exempt from paying PRSI.
Yes as long as you are under 66.
USC is a tax payable on your total income There is no relief for pension contributions..
The USC is payable at
- 0.5% on a person’s first €12,012 earned per annum
- 2% on the next €10,908
- 4.5% on the next €47,124
- 8% on the balance.
No. USC is payable regardless of age. However if 70 or over and where income does not exceed €60,000 it will be levied at a top rate of 2% on any income above €12,012.
Yes. However where income does not exceed €60,000 it will be levied at a top rate of 2% on any income above €12,012.
Yes social welfare is classed as PAYE income though PAYE is not deducted at source.
Yes from the 1st July 2013. Prior to this Maternity benefit was tax free.
Jobseekers assistance which may be claimed after 12 months claiming jobseekers benefit is not subject to PAYE.
Yes but if you have no other income it’s unlikely that you will owe any tax on the pension.
Yes your employment pension is subject to PAYE and this will be deducted at source.
Yes your share options are subject to PAYE.
No provided that the value does not exceed €500 per annum.
No. However if you incurred very significant medical expenses during the tax year you should contact your local Revenue office and they may agree to allow the tax relief in your certificate of tax credits. Otherwise you must wait till after the end of the tax year to claim your tax relief.
If an employee does not provide an employer with a PPS number or a certificate of tax credits then that employee will be subject to PAYE on the emergency basis. The employee’s total salary will be taxed at 20% for the first four weeks and thereafter at a rate of 40%.
Where an employee is taxed on a week 1/month 1 basis each pay period is looked at in isolation and pay accumulated from the beginning of the tax year has no bearing on the calculation of PAYE to be deducted.
This means that tax credits and the standard rate cut-off point which are not used in a pay period are carried forward and are available for use in the calculation of tax due in the following pay period within the same tax year.
You can only make a claim for medical expenses incurred if you have actually paid tax that can be offset by them.
BIK (Benefits-In-Kind) refers to additional benefits received by an employee. These benefits can be cars, accommodation or medical insurance.
Our free company car BIK calculator will do this for you. The taxable benefit depends on the cost of the car and annual business mileage and what running costs are paid for by your employer.
Yes. The BIK amount is treated as notional pay and taxed as normal salary.
No. These are not classed as BIK and are not subject to PAYE.
No. This is not classed as BIK and is not subject to PAYE subject to a cost ceiling of €1,000 in any five year period.
AVCs are additional voluntary contributions made to occupational pension schemes. A rebate of PAYE can be claimed from the Revenue Commissioners for these payments.
Yes. If you contact your local Revenue office, they can be added to your certificate of tax credits.
You will need to declare the dividends and your PAYE income to Revenue on a Form12 and pay any tax owed. Our systems can do this for you.
You will need to declare the net rental income and your PAYE income to Revenue on a Form12 and pay any tax owed. Our systems will complete the tax forms and rental accounts for you. Our systems can do all of this for you.
Yes. A bonus will be treated in the same manner as your salary for PAYE purposes.
