When you leave your old job you should be given a form P45. This is a very important document. You give the P45 to your new employer who will then continue to operate PAYE in the normal manner and allow you your normal tax credits when calculating the tax you must pay.
The form P45 is also used by the Tax Office to track your change of employment and to issue new Tax Credit Certificates in your new employer’s name.
Introduction
Everybody is entitled to a basic personal tax credit. The amount of your tax credit depends on your personal status i.e. Married, Single, Widowed or One Parent Family. We explain below under each heading the conditions for the relevant tax credit.
In addition, PAYE earners are entitled to a PAYE tax credit. This credit is not allowed to shareholder/directors who own more than 15% of the company. In addition children of such shareholder directors working in the business on a part time basis are not allowed the PAYE credit.
For tax year 2016 a single person who is a PAYE earner can earn up to €16,500 tax free. A married couple with one PAYE earner entitled to the PAYE tax credit can earn up to €24,750 tax free. If both spouses are PAYE earners and entitled to the PAYE tax credit, they can earn up to €33,000 tax free. However PRSI and the Universal Social Charge is payable based on gross income.
We provide information on the following matters in separate articles:
The Irish Self Assessment tax system applies to all self employed individuals along with PAYE earners who have non-PAYE income (that exceeds €5,000), e.g. Rental Income. In addition, it applies to Director Shareholders of Limited Companies and anybody who has income which is not dealt with through the PAYE system.
Whether you are in the tax system or not, the onus is on you to comply with all the rules and regulations of the Self Assessment system. You must ensure that your tax returns are submitted to the Revenue on time and that you also make your tax payments within the time limits allowed. If you do not comply with these rules you will incur interest and penalty costs on top of your normal tax liability. The Revenue police the system by way of Revenue Audits.
Along with a variety of other posts concerning self-assessment, we provide detailed information on the following so that you can check your tax position:
If you do not have a tax PPS number you will need to obtain one from your local social welfare office. This involves completion of a simple form. Once you receive a PPS number you should then contact your local tax office who will require another relatively simple form to be completed so that they can issue you with a Tax Credit Certificate.
This is the form you receive from your employer after the end of the tax year. Employers normally issue these forms in January or February after the end of the preceding tax year. It is a record of your pay and tax deducted for the tax year. You will need this form to claim tax refunds. In addition financial institutions look for these forms when applying for a mortgage as it is evidence of your income for the tax year.
The Form P60 also shows the gross pay for USC levy purposes and the amount of USC Levy deducted for the year.
This is the form you receive from your employer when ceasing employment. It is a record of your pay and tax deducted for the tax year involved with that particular employer. You will need this form to claim Social Welfare benefits, Tax refunds or to give to your new employer when starting a new job.
An employee obtains a Tax Credit Certificate from their Tax Office and the PAYE calculations are based on this certificate. This certificate contains details of your tax allowances and reliefs.
The tax credit certificate is a very important document, as the employer will calculate the monthly PAYE due based on your tax credit certificate. If this certificate is incorrect you may pay too much PAYE. The Tax Office are the only ones who can amend your tax credit certificate and it can only be done during the tax year.
If you think there may be an error on your tax credit certificate you should contact your local tax office immediately. You could be due a tax refund if you are not getting the correct tax credits. Alternatively if the tax office have over allowed your tax credits you could end up owing tax at the end of the tax year.
As the name implies it’s a Pay As You Earn system of taxation. Employers are obliged to deduct tax from your earnings and pay it over to the Revenue on a monthly basis. The amounts due for PRSI (Pay Related Social Insurance) and the Universal Social Charge are also collected through the PAYE system.
Employee’s have to get a tax credit certificate form the tax office and this is the form that the employer uses to calculate your tax deductions.
If you are due a refund for any or all of the last four tax years you will have to complete a tax return for the year to claim your refund from the tax office.
Sign up to our website and our systems will generate a completed tax return form 12 which can be printed out for signing and posting to your tax office.
There is a flat fee for each tax year and all tax refunds go directly to you from the Revenue. We do not take any commission out of your tax refund.
Every year millions of euros remain unclaimed from the Revenue by PAYE Taxpayers. Why? Because people are not aware of their entitlements and the Revenue do not tell you if they owe you money. In fairness to the Revenue, they are not fortune tellers and if you do not tell them that you are due a certain tax credit they will not know about it. The responsibility is on your shoulders to ensure that you claim whatever you are entitled to. To allow you check your tax position we provide detailed information on the following:
How to find out if you are due a tax refund?
What to do if you discover you are due a tax refund
Pay As You Earn (PAYE)
Tax Credit Certificates
Tax Credit Certificates – How Do I Get One?
Tax Credit Certificates – What Happens if I do not have one?
Tax Credit Certificates – Basic Tax Credits
Form P45
Form P60
Starting Your First Job
Changing Jobs
What Happens If I dont have a Tax Credit Certificate or a Form P45?
Ceasing Work
Flat Rate Expenses Deductions
Ceasing Employment – Lump Sum Payments
How Share Options are Taxed
The Tax implications of emigrating from or immigrating to Ireland
PRSI – Universal Social Charge
What are Benefits In Kind (BIK)
Social Welfare Benefits
