Top 50 Tax Questions
The Top 50 PAYE, Rental Income, Self Employed, Tax Credit and Deduction questions answered by our Expert Tax consultants in an easy to read question and answer format.
Click on each of these headings for a list of questions. A more detailed tax library is available here: Expert Tax Library
The Top 50 Q & A’s about PAYE Tax Returns
Answered by our Tax consultants in an easy to read question and answer format.
A more detailed tax library is available here: Expert Tax Library
Q1 What is PAYE?
PAYE (Pay As You Earn) is tax deducted from your salary / pension by either employers or pension providers.
Q2 What is a Form P60?
A P60 is an annual statement of the amount of PAYE and PRSI deducted by an employer or pension provider. It also includes details of the gross pay for USC purposes and the amount of USC deducted.
Q3 What is a Form P45?
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 along with USC details.
Q4 What is a Form PRD 60?
A PRD 60 is an annual statement of the amount of pension levy paid by a public sector worker.
Q5 How do I claim a tax back when unemployed ?
A P50 form is used to claim a tax and USC refund during the year if you are unemployed.
Q6 What is a certificate of tax credits?
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%.
Q7 How much of my income is 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 €34,550 for 2018.
Q8 Can I allocate surplus credits and standard rate cut-off bands to my spouse?
Under joint assessment where both spouses have an income for 2018 one can earn up to €43,550 taxed at 20 % and the other €25,550 taxed at 20%
Q9 What is the PAYE credit?
A PAYE credit is a special tax credit worth €1,650 that employees are entitled to.
Q10 I’m a proprietary director; am I entitled to the PAYE credit?
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 €1,150 for 2018.
Q11 Do I still deduct PAYE from a salary I receive from my own company?
Yes PAYE must still be deducted from your salary even if you own the company which is paying you.
Q12 Is there an age exemption for PAYE?
Q13 Do I pay PAYE if I have a medical card?
Yes if you have PAYE source income.
Q14 Am I entitled to an age credit?
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.
Q15 What are exemption limits?
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 2018 is €18,000 for a single person and €36,000 for a married couple.
Q16 What are flat-rate allowances?
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.
Q17 What is PRSI?
PRSI (Pay-Related Social Insurance) is additional tax deducted to fund social welfare and health benefits.
Q18 What’s my PRSI class?
Most employees pay Class A although some shareholder directors may pay Class S.
Q19 What is my rate of PRSI?
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.
Q20 Is there an age exemption for PRSI?
Yes persons aged 66 and over are exempt from paying PRSI.
Q21 Do I pay PRSI if I have a medical card?
Yes as long as you are under 66.
Q22 What is the USC?
The USC (Universal Social Charge) replaced the income and health levies. For 2018 USC is payable where a person’s income exceeds €12,012.
Q23 How much USC do I have to pay?
The USC is payable at
- 0.5% on a person’s first €12,012 earned per annum
- 2% on the next €7,360
- 4.75% on the next €50,672
- 8% on the balance.
Q24 Is there an age exemption for the USC?
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.
Q25 Do I pay USC if I have a medical card?
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.
Q26 Is social welfare PAYE income?
Yes social welfare is classed as PAYE income though PAYE is not deducted at source.
Q27 Does PAYE apply to maternity benefits paid by the Department of Social Protection?
Yes from the 1st July 2013. Prior to this Maternity benefit was tax free.
Q28 Is jobseekers benefit subject to tax?
Q29 Is jobseekers assistance subject to tax?
Jobseekers assistance which may be claimed after 12 months claiming jobseekers benefit is not subject to PAYE.
Q30 Is my state pension subject to tax?
Yes but if you have no other income it’s unlikely that you will owe any tax on the pension.
Q31 Is my employment pension subject to PAYE?
Yes your employment pension is subject to PAYE and this will be deducted at source.
Q32 Is children’s allowance subject to tax?
Q33 Is statutory redundancy subject to tax?
Q34 Are my share options subject to PAYE?
Yes your share options are subject to PAYE.
Q35 Is PAYE payable on a gift voucher I received from work valued at €500?
No provided that the value does not exceed €500 per annum.
Q36 Can my medical expenses be taken into account by my employer to reduce the amount of PAYE deducted?
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.
Q37 What does being taxed on an emergency basis mean?
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%.
Q38 What does being taxed on a week 1/month 1 basis mean?
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.
Q39 What does being taxed on a normal or cumulative basis mean?
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.
Q41 What is BIK?
BIK (Benefits-In-Kind) refers to additional benefits received by an employee. These benefits can be cars, accommodation or medical insurance.
Q42 How do you calculate BIK on a company car?
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.
Q43 Is BIK subject to PAYE, PRSI and the USC?
Yes. The BIK amount is treated as notional pay and taxed as normal salary.
Q44 Is the provision of travel passes for bus, train or Luas taxable as BIK?
No. These are not classed as BIK and are not subject to PAYE.
Q45 Is the provision of bicycles or bicycle safety equipment taxable as BIK?
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.
Q46 What are AVCs and do they affect the level of PAYE I pay?
AVCs are additional voluntary contributions made to occupational pension schemes. A rebate of PAYE 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 tax credits.
Q48. I have received dividends in addition to my PAYE income. How do I declare them?
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.
Q49. I have rental income in addition to my PAYE income. How do I declare it to the Revenue?
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.
Q50. Is an end of year bonus treated in the same way as my salary for PAYE purposes?
Yes. A bonus will be treated in the same manner as your salary for PAYE purposes.
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