CLASS A EMPLOYMENT |
The
pay threshold to determine whether people employed under a contract of service pay
PRSI at Class A or J remains at
€38.
Employees paid €38 to €287 inclusive in any week should be recorded under Subclass A0. Employees paid €287.01 to €400 inclusive in any week should be recorded under Subclass AX. In any week that the employee is paid more then €400 it should be recorded under Subclass A1 or A2 *. Participants in Community Employment earning €287 or less in any week should be recorded under Subclass A8. In any week that the pay is more than €287 record under Subclass A9. Community Employment supervisors and employees on apprenticeship schemes are insurable at Class A in the normal way. The annual pay ceiling for
PRSI had been increased to €44,180 for employees.
CLASS J EMPLOYMENT |
The Class J contribution normally relates to people with reckonable earnings of less than €38 per week (from all employments). However, a small number of employees are insurable at Class J
no matter how much they are paid, such as employees aged 66 or over and people in subsidiary employment (defined below).
OTHER CLASSES |
Class B, C, D or H employees paid up to €287 inclusive in any week record under subclass B0, C0, D0 or H0. Class B, C, D or H employees paid between €287.01 and €400 inclusive, record under subclass BX, CX, DX or HX. For people covered under Class J, S or K paid up to €400 inclusive in any week record under subclass 0 i.e. J0, S0 or Class M (for people within Class K) as appropriate. Employees or Self-employed (excluding those listed in note below) with pay or income of more than €400 in any week should be recorded under subclass 1 (i.e. B1, C1, D1, H1, J1, S1 or K1). Employees or Self-employed with pay or income more than €400 in any week, who do not have to pay the Health Contribution (*see note below) should be recorded under subclass B2, C2, D2, H2, J2, S2, or Class M (for people within Class K). The Class S minimum annual contribution for year 2005 remains at €253. The annual pay ceiling for
PRSI has been increased to €44,180 for employees.
* NOTE: |
Medical Card Holders, people aged 70 and over and recipients of a Social Welfare Widow's or Widower's Pension, One-Parent Family Payment or Deserted Wife's Benefit / Allowance or Widow's or Widower's Pension acquired under the social security legislation of a country covered by
EC Regulations do not have to pay the Health Contribution, even if their pay is more than €400 per week.
It is the employer's responsibility to establish if employees fall into this category. |
COMPONENTS OF THE
PRSI CONTRIBUTION
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The Pay Related Social Insurance (PRSI) contribution is made up of a number of different components including:
Social Insurance at the appropriate percentage rate for employees and employers which varies according to the pay of the employee and benefits for which he or she is insured. 2.00% Health Contribution, paid by the employee where applicable, goes to towards funding the Health Services. 0.70% National Training Fund Levy, included in the employer's contribution in Classes A and H. LEVELS OF PAYMENT FOR 2005 |
PRSI contributions will be payable as follows:
They will be paid at the appropriate percentage rates for employees with reckonable earnings up to €44,180. On reckonable pay of more than €44,180, the employer's share (Social Insurance and the 0.70% National Training Fund Levy in Classes A and H) is due and the 2.00% (Health Contribution) by the employee where applicable. Class S, social insurance at 3.00% and the 2.00% Health Contribution (where applicable) on all reckonable income. The Health Contribution and Training Fund Levy are included in the contribution rates outlined above.
RECKONABLE PAY |
PRSI is calculated on the employee's reckonable pay. Reckonable pay is the gross money pay
plus notional pay if applicable, reduced by Superannuation and Permanent Health Insurance contributions made by an employee, deducted under a net pay arrangement by the employer, which are allowable for income tax purposes.
The employee's portion of the Social Insurance Contribution is paid on the employee's reckonable pay to a ceiling of €44,180 in 2005. The employer's portion is payable on all reckonable pay of each employee.
PRSI-FREE ALLOWANCE FOR EMPLOYEES
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The
PRSI -free allowance remains at €127 per week (per individual employment) for employees with weekly reckonable pay of more than €287 in Classes A and H, and at €26 for all employees in Classes B, C and D. The allowance does not apply to the Health Contribution or the employer's share of
PRSI. In other words, in Class A it applies to the calculation of the 4% employee Social Insurance deduction, but not to the 2% Health Contribution. The allowance is noncumulative, so, it only applies for weeks of insurable employment in which
PRSI is payable (see "holiday pay" below).
Remember that this allowance does not alter the gross reckonable weekly pay threshold that determines the appropriate contribution subclass.It is important to note that the method of calculating
PRSI outlined above caters for the inclusion of the €127/€26
PRSI-free allowance.
For employees paid other than weekly, alternatives to the weekly
PRSI -free allowance are:
Weekly | €127 | €26 |
Fortnightly | €254 | €52 |
Monthly | €551 | €113 |
It is important to note that the method of calculating
PRSI outlined on pages 2 to 5 caters for the inclusion of the €127/ € 26
PRSI-free allowance.
For employees paid other than weekly, alternatives to the weekly
PRSI -free allowance are:
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A contribution week is each successive period of seven days starting on 1 January each year. Week 1 is the period from 1 to 7 January inclusive, week 2 from 8 to 14 January and so on. For 2005, the contribution week starts on a Saturday and ends on a Friday.A contribution at the appropriate class should be awarded to an employee for each contribution week or part of one, for which he or she gets paid.
Voluntary contributionsPeople who were insured at Classes A, B, C, D, H or S who are no longer insurably employed may opt to pay; may opt to pay Voluntary Contributions to provide cover for pensions.Applications must be made within 12 months from the end of the
PRSI contribution year in which a
PRSI contribution was last paid or credited. For further information contact:
Voluntary Contribution Section
Tel. (051) 356 000 or (01) 704 3000 ext. 6006/7
Earnings bands and
PRSI Subclasses
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