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LIVING IN IRELAND: An Integration Website for Migrants living in Ireland

Taxes and Banking

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Income Tax

How does the income tax system in Ireland work?

Employees in Ireland pay tax through the PAYE (Pay As You Earn) system. This means that your employer deducts the tax you owe directly from your wages, and pays this tax directly to the Revenue Commissioners.

How do I pay my income tax in Ireland?

It is important to ensure that your tax is dealt with properly and that your employer deducts the right amount of tax from your pay. To ensure that this happens, you will need to do two things (as soon as possible):

  • Apply to the Department of Social Protection for a PPS number. This is your individual identification number used for all dealings with Revenue and other government departments. On receipt of this number you should give it to your employer.
  • Apply for a certificate of tax credits by completing a Form 12A (available from your local tax office or to download from www.revenue.ie) and send it in to your local tax office. Your employer can supply any relevant information that you need to complete this form, for example, employer’s PAYE registered number. Revenue will send you a certificate of tax credits and issue a copy of your tax credits to your employer so that the correct deductions of tax can be made from your salary.

Your own personal circumstances decide the amount of tax credits you are entitled to. The tax office will then forward you a detailed statement of your tax credits. Your employer will also be notified of your tax credits.

How much tax will I pay?

The amount of tax you pay depends on a variety of factors including your marital status, whether you have children, whether you are in rented accommodation.

What are tax credits?

Tax credits reduce the amount of income tax that you pay. Under the tax credit system you are entitled to tax credits depending on your personal circumstances, for example, married person’s tax credits, PAYE tax credit, rental accommodation tax credit and medical expenses. For more information go to: www.revenue.ie

How do I claim tax credits?

The quickest and easiest way to claim tax credits is to use PAYE anytime.

PAYE anytime is an internet system that lets you do business with Revenue electronically 365 days a year. To use PAYE anytime you must register first: www.revenue.ie

Alternately, you can contact Revenue by phoning the PAYE LoCall Service which operates from Monday to Friday. You will need your PPS number to use this service.

Information facilities are also available in certain Revenue offices. Local Enquiry Offices are located in county offices outside Dublin.

What is Emergency tax?

If your employer has not received either:

  • A certificate of tax credits from the tax office, or
  • Form P45 (parts 2 and 3) from you, about your previous employment

Your employer will have to deduct tax on an emergency basis when paying your wages or salary. This means that a larger amount of tax is deducted from your pay than is necessary so you should obtain your tax credit certificate.

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P45s and P60s

What are P45s and P60s?

P45: If you leave your employment your employer must give you a P45. This is a statement of your pay and the tax and PRSI to date deducted by your employer. It is a very important document and you need it if:

  • You are changing job – to give to your new employer in order to avoid paying emergency tax
  • You are unemployed – to claim a tax refund, to claim social welfare benefits

If your employer does not give you a P45 you should ask for it.

P60: At the end of each tax year your employer must give you a P60 which is a statement of your pay and of the tax and PRSI deducted by your employer during the year. The P60 has two parts and it is an important document. You need it to send to the tax office to claim a statement of your tax liability (P21) at the end of the year or if you need to claim a benefit you would send the second part to the Department of Social Protection as evidence of your paid PRSI contributions.

What if my employer does not supply me with a P45 or P60?

You can inform your local tax office if your employer or former employer does not issue you with a P45 or P60.

If your employer does not issue you with a P60 or a P45 it may be that you have not been registered for PRSI by your employer. It also could be that you have been registered but your employer has not paid the PRSI contributions which are due or has not paid the correct amount. An employer is required by law to register all employees for PRSI, pay the correct contributions, maintain accurate records for all employees and to produce these records when requested by social welfare inspectors. If an employer fails to do so it can result in penalties, prosecution or both.

What if I suspect that my employer is not making PRSI and tax contributions on my behalf?

Your employer is legally obliged to provide you with a payslip that details the tax and PRSI deductions and PRSI contributions made on your behalf.

Where can I report an employer that is not making PRSI contributions on my behalf?

If you are still working with your employer you can complain in confidence (at your local social welfare office) and your name will be kept private. If it is proved that your current or former employer did not pay PRSI on your behalf, the employer may be forced to back-pay your PRSI contributions.

For your own security it is important that your employer pays your social insurance contributions. Being included in the PRSI system ensures you get your rights in relation to social welfare payments if you become unemployed, ill, if you are injured in work, if you take maternity leave or apply for a pension.

You should report the problem to your local Revenue office. Details of your local Revenue office can be found by entering your PPS Number at the ‘Contact Locator’ link at www.revenue.ie.

Have I committed an offence if I have worked for an employer and not paid PRSI?

Provided that you did not consent to the employer not paying contributions on your behalf you have not committed an offence. If you report an employer that has failed to pay contributions it may be possible that the inspectors can force the employer to back-pay your PRSI.

Can I get a refund of some of the tax I have paid?

There are various circumstances when you may get a refund of tax you have paid:

  • Your employer is obliged to deduct tax at an emergency rate if he/she has not received your Certificate of Tax Credits or a P45 from a previous employer. Once the employer receives either of these documents he/she can calculate how much tax they should be deducting from your wages. The employer can at this stage refund the amount of tax that you were overcharged
  • After each Tax Year (after December 31st) you can ask Revenue to check if you paid too much tax in that year. You can do this by submitting your form P60 to your local tax office and requesting an end of year review (P21) for that year.
  • If you have been unemployed for 4 weeks or if you are leaving Ireland you may also get a tax refund. The relevant form is Form P50 which is available from your local tax office and www.revenue.ie.

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What is a P21?

A P21 is a statement of total income, tax credit and tax paid for a particular tax year. This statement will show if you have overpaid or underpaid tax in a particular year. If there is an overpayment a refund will be made into your bank account (if you have provided Revenue with your bank details) or a cheque for the amount will be issued. If you have underpaid tax your local office will contact you about this.

What do I need a P21 for?

You may need to send a P21 to your local authority, bank or building society as proof of earnings when looking for an education grant, a house or a loan. It also shows whether you have overpaid or underpaid tax for the year. If you have overpaid, a cheque for the amount will be issued. If you have underpaid tax your local office will contact you about this.

Where can I get more information about tax?

You can

  • Visit www.revenue.ie
  • Call to your local tax office
  • Call to the Central Revenue Information Office located in Cathedral Street, Dublin 1 
  • Phone the PAYE Locall Service

What tax do I pay if I am an employer?

Any employer must register for PAYE purposes if they make payments greater than:

  • €8 per week (or €36 per month) for a full-time employee or
  • €2 per week (or €9 per month) for an employee who has other employment.

An employer must also notify the Revenue Commissioners of their name and address and that they are making such payments within 9 days of the date of commencement.

How do I register with the Revenue Commissioners as an employer?

To register for PAYE/PRSI you must complete one of these forms:

  • Form TR1 if you are a sole trader or partnership
  • Form TR2 if you are registering as a company
  • Form PREM Reg if you are already registered for Income Tax or Corporation Tax.

When you return the completed form to Revenue you will receive confirmation of your registration as an employer and a registered number for PAYE and PRSI purposes.

How do I pay my tax?

Each year employers must submit their records of PAYE/PRSI and Income Levy deducted from their employees. This is done by completing a P35 manually or online.

You can get further assistance on the Employer’s Guide to PAYE by calling the Employer Information and Customer Service Unit:

Telephone: 1890 25 45 65
Email: employerhelp@revenue.ie
Website: www.revenue.ie

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Banking

Who offers accounts?

Banks, building societies, credit unions and the post office offer different accounts.

What do I need to open a bank account?

To open a bank account in Ireland you must have:

  • 1 – 2 forms of photo identification and
  • Proof of address in Ireland
  • PPS number (in some cases)

What forms of photo identification can be used?

  • A valid passport
  • Driver’s licence
  • Age Card issued by the Gardaí
  • An identification form with a photograph signed by a member of An Garda Síochána
  • Documents issued by Government departments showing your name.

What can I use as proof of address?

  • A recent utility bill (for example electricity or telephone bill)
  • A statement from the tax office
  • A current car or home insurance policy that shows your address
  • A document issued by a Government department that shows your address
  • A social insurance document that shows your address
  • A letter from your employer or licensed employment agency stating that you started work but cannot yet provide evidence of your Irish address (you will have to provide evidence of your address at a later date).

Is it difficult to open a bank account in Ireland?

You should be aware that you may experience initial difficulty in opening a bank account. Different banks have different rules.

How can I transfer money to my home country from Ireland?

There are a number of ways you can transfer money to other countries.

  • Using a money transmitter (authorised by the Financial Regulator)
  • At a bank
  • At any post office branch
  • At some credit unions

Where can I get independent advice and information about banking products and services?

The Competition and Consumer Protection Commission provides consumer information and education about the costs, risks and benefits of financial products. If you require further information, you should contact:

Competition and Consumer Protection Comission 
Parnell House 

14 Parnell Square

Dublin 1

Lo-call: 1890 432 432
Website: www.consumerhelp.ie

Where can I get help with my household budget or managing my money?

The Money Advice and Budgeting Service (MABS) is a free and confidential service for people in Ireland with debt and money management problems. There are MABS offices all over Ireland, staffed by trained Money Advisers. Money Advisers will:

  • Help you deal with your debts and create a budget
  • Examine your income to make sure you are not missing out on any of your entitlements
  • Contact your creditors on your behalf with offers of payment if you are not able to do it yourself
  • Help you decide on the best way to make the payments

For details of your nearest MABS office go to www.mabs.ie or contact the MABS Helpline: 0761 07 2000.

Supported by

This project is co-financed by the European Commission under the European Integration Fund
and is supported by the Office for the Promotion of Migrant Integration in the Dept of Justice & Equality & Pobal.