The Top 50 questions Tax Advice to PAYE answered by our Tax consultants in an easy to read question and answer format
Click on each of these headings for a list of questions and click on each question for the answer. A more detailed tax library is available here: Detailed Tax Library
The Top 50 Q & A's about PAYE Tax Returns
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.
A P45 is given to an employee on cessation of employment and it contains the amounts of PAYE and PRSI deducted for that particular year.
A PRD 60 is an annual statement of the amount of pension levy paid by a public sector worker.
A certificate of income levy deducted is a statement of how much income levy your employer has deducted in 2010 and should be received by all employees with their P60.
A certificate of tax credits is a certificate that is received annually from the Revenue Commissioners outlining an employee's 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 €32,800.
Under joint assessment up to €9,000 of standard rate cut-off and €1,650 in personal credits can be transferred to a spouse.
A PAYE credit is a special tax credit 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.
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.
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 2011 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 on salaries over €352 per week. The first €127 earned per week is exempt and the remainder is taxed at 4%. For employees on Class S, the total salary is taxed at 4%.
Yes persons aged 66 and over are exempt from paying PRSI.
Yes as long as you are under 66.
The USC (Universal Social Charge) replaces the income and health levies and is payable from 1st January 2011 and is payable where a person's income exceeds €4,004.
The USC is payable at 2% on a person's first €10,036 earned per annum, 4% on the next €5,980 and 7% on the balance.
No but where a person is over 70 the rate of USC on all income earned over €10,036 will be capped at 4%.
Yes but income earned over €10,036 will only be levied at the rate of 4%.
Yes social welfare is classed as PAYE income though PAYE is not deducted at source.
No. Maternity benefit is 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 €250 per annum.
Yes. If you contact your local Revenue office, they can be added to your certificate of tax credits based on what you paid in the previous year. This credit will not be allowed from 1st January 2012.
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 41%.
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.
Q40 I didn't earn enough wages for PAYE to be deducted; can I still make a claim for medical expenses incurred?
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, a BIK is subject to PAYE, PRSI and the USC.
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 and PRSI can be claimed from the Revenue Commissioners for these payments.
Q47. Can fixed monthly pension PRSA payments be used to reduce the amount of PAYE deducted from my salary?
Yes. If you contact your local Revenue office, they can be added to your certificate of credits.
You will need to declare the dividends and your PAYE income to Revenue on a Form12 and pay any tax owed.
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.
Yes. A bonus will be treated in the same manner as your salary for PAYE purposes.