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.
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):
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.
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.
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
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.
If your employer has not received either:
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.
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:
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.
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.
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.
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.
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.
There are various circumstances when you may get a refund of tax you have paid:
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.
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.
What tax do I pay if I am an employer?
Any employer must register for PAYE purposes if they make payments greater than:
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.
To register for PAYE/PRSI you must complete one of these forms:
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.
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:
Banks, building societies, credit unions and the post office offer different accounts.
You should be aware that you may experience initial difficulty in opening a bank account. Different banks have different rules.
There are a number of ways you can transfer money to other countries.
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
14 Parnell Square
Lo-call: 1890 432 432
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:
For details of your nearest MABS office go to www.mabs.ie or contact the MABS Helpline: 0761 07 2000.
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.