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.
Yes if you have PAYE source income.
Yes. A bonus will be treated in the same manner as your salary for PAYE purposes.
As a PAYE worker with consultancy income, you must register for Self Assessment if your non-PAYE income exceeds certain thresholds:
- Register for Self Assessment if:
- Your taxable non-PAYE income is €5,000 or more after deductions, or
- Your gross non-PAYE income is €30,000 or more.
- Do not register if:
- Your taxable non-PAYE income is less than €5,000, and
- Your gross non-PAYE income is less than €30,000, and
- Your non-PAYE income is coded for PAYE, meaning Revenue adjusts your tax credits and standard rate cut-off point.
What to do if you need to register:
If your consultancy income exceeds the thresholds, you must register for Self Assessment via Revenue’s eRegistration service or by completing Form TR1. You’ll then need to file Form 11 annually.
If below the thresholds:
You can report the income to Revenue, which will adjust your PAYE system accordingly.
The tax form you need depends on your income:
- Form 11 (Self Assessment Income Tax Return):
- Complete Form 11 if:
- You have non-PAYE income (e.g., consultancy income) that requires Self Assessment.
- Your taxable non-PAYE income exceeds €5,000, or your gross non-PAYE income exceeds €30,000.
- You need to make a self-assessment of your tax liability.
- Form 11 is completed online via Revenue Online Service (ROS).
- Form 12 (Income Tax Return for PAYE Workers):
- Complete Form 12 if:
- You are a PAYE worker with non-PAYE income under the thresholds (€5,000 taxable or €30,000 gross).
- The non-PAYE income is coded for PAYE purposes (Revenue adjusts your tax credits and cut-off point).
- Form 12 is available in paper format or online via myAccount on the Revenue website.
Which form to use:
- If your consultancy income exceeds the thresholds, complete Form 11.
- If your income is below the thresholds and coded for PAYE, complete Form 12.
No, you cannot simply decide to be self-employed to avoid PAYE tax. Revenue determines your employment status based on the facts of your working relationship.
Revenue’s View:
- Revenue assesses factors such as control, financial risk, and independence to decide if you are an employee or self-employed.
- Employees: Work set hours, under employer control, and receive benefits like sick leave and holiday pay.
- Self-Employed Consultants: Work for multiple clients, control their hours, and bear financial risk.
Revenue’s Five-Step Framework:
Revenue uses a framework to assess your status, considering:
- Control: Who decides how, when, and where you work?
- Financial Risk: Does the worker bear the cost of mistakes or business investments?
- Mutual Obligation: Does the employer have to offer work, and is the worker obliged to accept it?
- Integration: Is the worker part of the employer’s business, or do they operate independently?
- Other Factors: Entitlement to benefits and ability to work for multiple clients.
Misclassification Risks:
- If you are incorrectly classified as self-employed, Revenue may reclassify you as an employee and require backdated taxes, PRSI, and USC, with penalties and interest.
Example:
- If you work for one company, follow their instructions, and receive a regular salary, Revenue is likely to classify you as an employee, even if you consider yourself a self-employed consultant.
Conclusion:
You cannot decide to be self-employed just to avoid PAYE. Your status is determined by your working relationship, as assessed by Revenue. If unsure, consult a tax professional or Revenue for guidance.
You will need to declare the net rental income and your PAYE income to Revenue on a Form 12 and pay any tax owed. If this income is over €5,000 net or €30,000 gross, you are counted as a chargeable person and must complete a Form 11. FastTax.ie guides you through the completion of the Form 11 as easily as possible.
You must declare dividends as part of your annual tax return. If you’re a PAYE employee with dividends, you can file a Form 12 through Revenue myAccount.
Or if you are a chargeable person, FastTax.ie makes it easy to declare this income on your Form 11. PAYE workers with non-PAYE income over €5,000 net or €30,000 gross must complete a Form 11.
Yes. If you’re making regular Personal Retirement Savings Account (PRSA) contributions, you can ask Revenue to update your Tax Credit Certificate so that tax relief is applied through your payroll. This reduces the PAYE deducted from your salary each month.
AVCs (Additional Voluntary Contributions) are extra payments you make into your occupational pension scheme to boost your retirement fund. You can claim tax relief on AVCs at your highest tax rate (20% or 40%), which reduces the amount of tax you pay. You won’t automatically get tax relief through payroll — you need to claim it through Revenue myAccount or your annual tax return. The amount you can claim each year depends on your age. Try our FastTax.ie calculator to estimate your potential tax relief: https://www.fasttax.ie/tax-calculators/pension-contributions-tax-relief-calculator/
No, this benefit is tax-free under the Bike to Work scheme.
The exemption covers up to:
- €1,250 for a regular bike
- €1,500 for an electric bike or pedelec
- €3,000 for cargo and ecargo bikes
You can use the scheme once every four years.
No, travel passes provided under the TaxSaver scheme are not taxable. There’s no PAYE, PRSI, or USC on this benefit. Your employer buys the pass (often through a salary sacrifice arrangement) and passes it on to you tax-free. A handy way to cut commuting costs if it’s offered where you work.
Yes. The BIK amount is treated as notional pay and taxed as normal salary. It’s subject to PAYE, PRSI and USC. Your employer will deduct the tax on BIK through payroll.
The BIK on a company car depends on:
- The car’s Original Market Value (OMV)
- Annual business mileage
- The car’s CO₂ emissions category
- Whether your employer covers running costs like fuel
The BIK rate can range from 9% to 30% of the OMV per year.
Temporary OMV reductions for company cars have been extended into 2026, and a new lower BIK category (6%–15%) applies to zero-emission vehicles.
BIK (Benefit-In-Kind) is the value of non-cash benefits you receive from your employer, like:
- Company cars
- Company-paid health insurance
- Free accommodation
These benefits are treated like extra salary for tax purposes.
You can only claim tax relief on medical expenses if you’ve actually paid tax in the year. If you didn’t earn enough to pay PAYE, there’s no tax to refund. However, if you had any taxable income (like part-time work or social welfare that’s taxable), you might still qualify for some refund.
Cumulative basis is the standard tax calculation.
Unused tax credits and cut-off points from earlier in the year are carried forward and used to reduce your tax in later pay periods.
It ensures that your tax is spread correctly across the year and balances out any over- or under-deductions.
When you’re on Week 1/Month 1 basis (non-cumulative tax), each pay period is treated separately. Your tax credits and cut-off points don’t carry forward from previous weeks or months. This can sometimes result in overpaying tax, which Revenue may balance out later in the year.
Emergency tax applies if you don’t provide your PPS number or your tax details when starting a new job.
- Initially, you may be taxed at the 20% rate on a limited amount.
- After four weeks, you could be taxed at 40% on all earnings.
Revenue will correct this and refund overpaid tax once your proper tax details are registered.
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.
No, provided it’s within the Small Benefit Exemption. You can receive up to five non-cash gift (like a voucher) per year, tax-free, up to €1,500 in total from your employer for 2026. If the voucher or combined gifts value is over €1,500, the benefit becomes fully taxable.
Yes. The rules changed after 2024.
Pre-2024 Taxation:
– Income Tax on share option exercise was under self-assessment
– Employees were responsible for filing tax returns
– Employer did not deduct tax through payroll
Post-2024 Taxation:
– Employer now responsible for deducting Income Tax through PAYE
– Employees no longer need to file a specific Income Tax Return for share option exercises
From 1 January 2024, share option gains are subject to PAYE and the Employer must:
– Calculate the taxable gain (taxable gain = market value of shares at exercise – option price)
– Deduct appropriate Income Tax
– Include in regular payroll reporting
No, statutory redundancy payments are tax-free. Any amounts above the statutory limit may be taxable, but the basic statutory lump sum is fully exempt.
No. Child Benefit is completely tax-free. It’s paid directly by the Department of Social Protection and doesn’t need to be declared anywhere on your tax return which is one less thing to think about.
Yes your employment pension is subject to PAYE and this will be deducted at source.
Yes, the State Pension is taxable. If the State Pension is your only source of income, you usually won’t owe tax. But if you have other income (like an employment pension, rental income, or a salary), your total income might push you over the tax-free thresholds and you could owe tax.
No, Jobseeker’s Allowance is not taxable. It’s a means-tested social welfare payment and is fully tax-free. This is different from Jobseeker’s Benefit, which is based on your PRSI contributions and can be taxable, so it’s worth knowing which one you’re getting.
Yes. Tax is not deducted at source, it’s collected by adjusting your tax credits and rate bands when Revenue reviews your full year’s income.
Yes, Maternity Benefit is taxable income. However, PAYE is not deducted directly from the payment. Instead, Revenue adjusts your tax credits and cut-off points to collect any tax due, often through your payslip later in the year.
Social welfare payments are not classified as PAYE income. However, some taxable social welfare benefits (like Jobseeker’s Benefit or Maternity Benefit) must be included in your total taxable income. The key thing to note is that tax isn’t deducted at source on these payments, it’s calculated later when Revenue assesses your overall income.
USC is charged progressively (once your income exceeds €13,000).
2026 rate bands (new):
- 5% on the first €12,012
- 2% on the next €16,688 (up to €28,700)
- 3% on the next €41,344 (up to €70,044)
- 8% on any income above that
Non-PAYE income over €100,000 may also include a 3% surcharge (11% total on that excess)
The Universal Social Charge (USC) is a tax on your total income (including notional pay and before pension contributions). Unlike some taxes, pension payments don’t reduce your taxable income. It applies to individuals with gross annual income of over €13,000.
A medical card affects things like GP and prescription costs, not how your income is taxed. PAYE, PRSI and USC are all still deducted as normal, regardless of medical card status. (The one exception: full medical card holders aged under 70 get a reduced 2% top USC rate on income up to €60,000). Having a medical card does not exempt you from paying PRSI if you’re under 66.
Most employees are Class A PRSI: 4.2% of your weekly gross pay. After 1st October 2026, this increases to 4.35%.
No PRSI is charged on weekly earnings under €352 in 2026.
Most self-employed people are Class S PRSI: 4.2% of income with a minimum annual contribution of €500. This rate also increases to 4.35% after 1st October 2026. Self-employed persons whose income from all sources is less than EUR 5,000 per year are not liable to PRSI.
Most employees pay Class A PRSI. Some proprietary directors, self-employed people, and certain company shareholders may pay Class S PRSI.
PRSI (Pay-Related Social Insurance) is a social insurance contribution deducted from your wages. It helps fund social welfare benefits like Jobseeker’s Benefit, Maternity Benefit, and the State Pension.
Flat rate allowances are tax deductions for certain jobs or professions to cover the cost of tools, uniforms, or other work-related expenses that you usually have to pay yourself.
How are they applied?
- Revenue automatically applies flat rate allowances to your Tax Credit Certificate if you’re in an eligible role.
- The allowance reduces your taxable income, meaning you pay less tax.
- If you think you’re entitled but don’t see it applied, you can request it through your Revenue myAccount.
What are the most common flat rate allowances?
Some common examples include:
- Teachers: €518 per year.
- Nurses and Midwives: €733–€1,172 per year depending on uniform and laundering arrangements.
- Shop Assistants: €121 per year.
- Carpenters: €247 per year.
- Engineers: €427 per year.
- Bar staff: €97 per year.
There are hundreds of specific allowances based on profession.
You can check the full list on the Revenue flat rate expenses page here.
If you’re aged 65 or over, exemption limits may apply.
If your income is below the exemption limit, you can apply to Revenue for an exemption certificate, meaning PAYE does not need to be deducted.
2025 Exemption Limits:
- €18,000 for a single person.
€36,000 for a married couple or civil partners.
Yes. If you are aged 65 or over during the tax year, you are entitled to the Age Tax Credit, which is:
- €245 for a single person.
- €490 for a married couple or civil partners.
Yes. PAYE must still be deducted from your salary, even if you own the company that’s paying you. Revenue treats you the same as any other employee when it comes to your own salary, being the owner doesn’t change how that income is taxed. Where things get more complex is your overall tax position as a director, which is often worth getting a second opinion on.
No. If you own more than 15% of the company (a proprietary director), you are not entitled to the PAYE credit on salary from that company.
However, you can claim the Earned Income Tax Credit, which is €2,000 in 2026.
The PAYE (Employee) Tax Credit for 2026 is €2,000. This credit is automatically applied to reduce the amount of tax deducted from your earnings under PAYE.
Yes—under joint assessment you can transfer unused tax credits and rate bands between spouses or civil partners. For 2026:
- One-income couple: €53,000 at 20%
- Two-earner couple: Up to €53,000 + the lower earner’s income (capped at €35,000), max €88,000 at 20% .
This is determined by your standard rate cut-off point, shown on your Tax Credit Certificate. For 2026:
Single person: €44,000 taxed at 20%.
Higher if you’re jointly assessed with spouse or civil partner.
A Certificate of Tax Credits shows your tax credits and the amount of your income that’s taxed at the lower 20% rate. Revenue issues this to you and your employer, usually at the start of each year or when your tax situation changes.
If you stop working, you might be due a tax refund for the part of the year you were employed.
How to claim:
- Log in to Revenue myAccount.
- Go to PAYE Services > Request Statement of Liability.
- Revenue will review your tax for the year and issue any refund due.
You don’t need a P45 as your employer reports your final pay directly to Revenue.
Tip: You can claim a refund as soon as you stop working, no need to wait until the end of the year.
PAYE (Pay As You Earn) is tax deducted from your salary/pension by either employers or pension providers. It covers Income Tax, USC and PRSI, all calculated and taken out before your pay reaches your bank account, so as a PAYE worker, most of the day-to-day tax admin is already handled for you automatically. If PAYE workers wish to file a tax return (to claim back medical expenses or ensure correct tax applied), they would file a Form 12. This is unlike those deemed to be self-assessed who file a Form 11.
