3.1 What elements of PRSI are paid through the Special Collection System?
The Social Insurance element of PRSI is payable by both the employer and the employee through the Special Collection System.
The Health Contribution is not collected by the Special Collection System. An employee should pay the Health Contribution directly to Revenue if paying Income Tax in this State.
Enquiries about Health Contributions and employees' entitlements to the Health Services should be addressed to the Department of Health and Children or the local Health Board Offices.
With effect from 1 January 2004 PRSI must be operated by employers in respect of the taxable value of most benefit-in-kind and other non-cash benefits provided by them for their employees. Full information on how these new arrangements apply are available from Revenue - "Employers guide to operating PAYE and PRSI for certain benefits" at 'www.revenue.ie' or your local tax office. Please note that application of PRSI to benefit-in kind will operate the same for PAYE and non-PAYE employees.
3.2 How do I calculate PRSI liability?
Employer's Share
This is a percentage of the employee's gross earnings which you are obliged to pay. It cannot be deducted from the employee's earnings, and is calculated as follows:
Employee's gross reckonable earnings X Employer's Rate of PRSI (see SC7 for details of rates)
Employee's Share
The calculation of the employee's share of PRSI is slightly more complicated. This is because employees have a weekly PRSI-Free Allowance on which PRSI is not payable (if the employee is paid fortnightly or monthly, an adjusted Allowance is given).
The employee's share of PRSI is calculated as follows:
Employee's gross reckonable earnings, less PRSI Free Allowance X Employee's rate of PRSI (see SC7 for details of rates)
If the employee has two or more concurrent insurable employments, please see below - concurrent employments.
The PRSI-Free Allowance applies only to the employee's share of PRSI. The employer's share is calculated on the employee's gross earnings. The Allowance is noncumulative and only applies to weeks in which PRSI is payable. In other words, it can only be given up to the point where the employee's earnings reach the employee ceiling.
For example, if an employee's earnings reach the employee ceiling during the twelfth week of the Tax Year s/he will only receive twelve weeks' Allowance during the entire Tax Year. An employee whose earnings do not reach the employee ceiling during the Tax Year will receive the Allowance for every week she or he works.
Therefore, if the employee's earnings exceed the employee ceiling, you should on no account give the employee 52 weeks' Allowance. This will result in an underpayment of PRSI, and you will be billed for the outstanding sum.
The PRSI ceiling, rates of payment, and the Allowance are subject to change each year. Details of the current ceiling and rates figures are available on form SC7 from PRSI Special Collection Section.
3.3 What if my employee has other earnings?
Concurrent Employments
If an employee is engaged in two or more concurrent insurable employments, PRSI must be paid on all earnings up to the prescribed ceiling in each employment. If the employee's cumulative earnings for the Income Tax Year from two or more concurrent employments exceed the prescribed employee ceiling, s/he may claim a refund of any PRSI overpayment. However, the employer is not entitled to any refund in such circumstances.
Consecutive Employments
If a new employee produces either an Irish Income Tax form P45 or a Special Collection System form SC3, showing details of previous earnings, you can assume that any PRSI due on these previous earnings has already been paid. The PRSI liability for the new employment will then only be calculated on the balance between the amount of earnings shown on the form P45 or SC3, and the employee ceiling.
Similarly, if one of your employees moves from the PAYE system to the Special Collection System within a Tax Year, any earnings s/he had on which PRSI was paid can be offset against the ceiling when calculating the liability under the Special Collection System.
When you are offsetting previous earnings in this manner, it is vital that you complete the section on previous earnings on the End-of-Year form SC1b (see section 3.6).
If a new employee does not produce a P45 or an SC3, you cannot assume that PRSI has been paid on previous earnings in the Tax Year. Any previous earnings cannot therefore be offset against your PRSI liability.
3.4 How should I record PRSI Information?
Contribution tables (SC1) are available from PRSI Special Collection to employers of non-PAYE employees. Details of wages and PRSI contributions for each non-PAYE employee should be recorded on this table on a weekly/fortnightly/monthly basis. You should ensure that the instructions accompanied on the SC1 are carefully observed.
When PRSI has been paid in respect of an employee's earnings up to the prescribed ceiling, no further payment will be due for the remainder of the Tax Year. However, contributions will continue to be awarded to the employee while s/he remains in work, so you should continue to record the number of weeks of insurable employment for the employee in that year.
3.5 How do I pay the money?
You should send remittances of PRSI to:
The Accountant
Department of Social and Family Affairs
Government Buildings
St Alphonsus Road
Dundalk
Co. Louth
Contributions should be sent not later than 9 days after the end of the month for which they are due. A completed form SC2 should ALWAYS be sent with each remittance. Copies of these forms are available from PRSI Special Collection Section.
If you do not send form SC2 with your remittance, we will not know where the money came from and your account will not be credited.
If you wish to make payments electronically, please contact PRSI Special Collection Section for details on how to do so.
3.6 What do I do at the end of the Tax Year?
Annual End-of-Year Return forms for recording PRSI details. These forms (SC1b) should be completed at the end of each Income Tax Year and sent to PRSI Special Collection Section.
The Income Tax Year ends on 31 December, every year, and the Return is due in PRSI Special Collection Section by 15 February. If any of your employees’ earnings reached the employee ceiling in the course of the Tax Year, it is important that you indicate in the space provided on the SC1b form the week or month in which this happened. When sending in the SC1b forms, you must also send in the SC1b(summ) form.
It is important to include on the SC1b form any weeks of insurable employment worked by your employee after the ceiling was reached, as contributions will still be awarded to him/her after the full liability for PRSI payment has been met.
At the end of each Income Tax year, you should also give a completed form SC4 to each non-PAYE employee certifying the number of contributions paid in respect of the employment for that year.
Where a non-PAYE employee ceases employment during an Income Tax Year, a cessation of employment certificate (SC3) should be given to him/her. You should ensure that Part 1 of the SC3 is fully completed and that the carbon entries in Parts 2 and 3 are legible.
Please see Appendix 1 for further information on PRSI Special Collections forms.
3.7 What if I also have PAYE employees?
If you also have PAYE employees, their details should be communicated to Revenue in the normal manner.
If your employee's earnings are split between PAYE and non-PAYE earnings, you should ensure that PAYE details are returned to Revenue and the non-PAYE details are returned to PRSI Special Collection Section.
It is important that the details you send to us on the SC1b form, in respect of your non-PAYE employees, are NOT duplicated on your P35 return to Revenue. If you do this, Revenue will bill you for the money submitted to this Department, and you will have to amend your P35 to remove the details proper to this office.
3.8 Where can I get more Information?
Any enquiry about the PRSI Special Collection System can be addressed to:
PRSI Special Collection Section
Social Welfare Services Office
Government Offices
Cork Road
Waterford
Telephone: Waterford (051) 356011/59
Dublin (01) 704 3000 Ext: 6011/59
Fax: Waterford (051) 877 838
Website: 'www.welfare.ie'
If you are unsure as to the insurability status of an employment or the correct Contribution Class, contact:
SCOPE Section
Social Welfare Services Office
2/3 Parnell Square East
Dublin 1
Telephone: (01) 804 440