Advance Notice of PRSI Changes for Computer Users 2013


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Information Services
Department of Social Protection
Social Welfare Services
College Road
Sligo

2013
Advance notice of PRSI changes for computer users

This notice contains rate changes in PRSI announced in the December 2012 Budget.
Changes are effective from 1 January 2013.

Budget 2013 PRSI Changes

 

Changes to Employee PRSI

There will be no impact on employees with weekly earnings which do not exceed €352.

For employees whose weekly earnings exceed €352, the weekly PRSI-free allowance available to employees who pay PRSI, is being abolished. The weekly PRSI-free allowance of €127 applies to Class A, H and E contributors. The weekly PRSI-free allowance for modified rate contributors (Classes B, C and D) amounting to €26 is also being abolished.

Minimum/Flat rate Self-employed Payments

  • Self-employed contributors with annual self-employed income over €5,000 pay Class S PRSI at the rate of 4%, subject to a minimum payment. The minimum payment for self-employed contributors is increasing from €253 to €500.
  • For those with an annual self-employed income in excess of €5,000 but who have no net liability to tax, the Class S flat rate of payment is being increased from €157 to €310.
  • In line with these changes, the flat rate of payment of Voluntary Contributions made by former self-employed contributors is also being increased from €253 to €500.
  • Consequential increases in the minimum payment of other Voluntary Contributors also arise. The minimum payment for higher rate Voluntary Contributors (former Class A, H and E) will increase from €317 to €500 and for lower rate Voluntary Contributors (former Classes B, C and D) will increase from €126 to €250.

Broadening of the base on which PRSI is charged

Currently modified rate contributors are exempt from PRSI in respect of self-employed earned income (from a profession or trade) and any other unearned income. This exemption is being abolished in Budget 2013. All such income will become liable to PRSI at the rate of 4%, which will be collected through the Revenue Commissioners' Self-assessment system. There will be no entitlement to social insurance benefits based on the payment of this contribution. Employees with no additional earned self-employed income but who do have unearned income only, are not affected by this measure in 2013.

Taxation of Maternity Benefit

With effect from 1 July 2013, Maternity Benefit payments will be taxed in full. No tax is deducted at source by the Department of Social Protection. All enquiries about your tax liability should be addressed to your local tax office.

Employer's PRSI

There are no changes in employer's PRSI rates.

General PRSI Information

Income for PRSI purposes

PRSI is calculated on the employee's reckonable pay plus notional pay (or benefit in kind) if applicable.

Share-based Remuneration

  • Employee PRSI only is payable on share-based remuneration. There is no employer PRSI chargeable on share-based remuneration.
  • The obligation to deduct and remit PRSI in respect of share-based remuneration generally rests with the employer. Accordingly the PRSI payable should be deducted by the employer through payroll along with other PRSI liabilities and remitted to the Collector-General with the monthly P30 return.
  • Different arrangements may apply in the case of PRSI on gains from the exercise of certain share options.

For more information, log on to www.welfare.ie and www.revenue.ie (Revenue - Irish Tax & Customs).

Illness Benefit and Occupational Injury Benefit

Illness Benefit and Occupational Injury Benefit are taxable payments. When an employee is absent from work due to illness and receives or is entitled to receive illness or occupational injury benefit, tax is collected through the PAYE system. These benefits are not however subject to PRSI or USC. PRSI should only be charged on the difference between the wages, salary etc., and the amount of the Illness Benefit/Occupational Injuries Benefit received.

Pension Contributions

  • PRSI is fully chargeable on payments by private sector employees in respect of:
    • Superannuation contributions
    • Permanent health benefit schemes (including income continuance schemes)
    • Revenue approved schemes established under irrevocable trusts, overseas pension schemes and other Revenue exempt approved schemes
    • Personal Retirement Savings Account
    • Deductions in respect of Revenue approved retirement funds
  • Civil and public servants will pay PRSI on the 'Pension levy' portion of their salaries.
  • Civil and public service employers do not have to pay any employer PRSI on the 'Pension levy'.

Employee's Income Thresholds

  • The threshold for employee PRSI remains at €352 a week.
  • Office holders pay PRSI at a rate of 4% on all income, where their income is over €5,200 per annum.
    They should be returned at Class K.
  • People with a nil liability, such as persons in receipt of occupational pensions should be returned at Class M.
  • For income of more than €500 a week, Subclass A1, A4, B1, C1, D1, H1, J1, or S1 should be returned.
  • PRSI Classes B, C and D will pay PRSI at 0.9% below €1,443 a week and 4% above €1,443 a week.

Employee's PRSI-Free Allowance

For employees whose weekly earnings exceed €352, the weekly PRSI-free allowance available to employees who pay PRSI, is being abolished. The weekly PRSI-free allowance of €127 applies to Class A, H and E contributors. The weekly PRSI-free allowance for modified rate contributors (Classes B, C and D) amounting to €26 is also being abolished.

Self-employed PRSI

  • The Class S rate remains at 4% and continues to be payable only on annual income of €5,000 or more.
    The minimum annual contribution for Class S has been increased from €253 to €500.
  • For those with an annual self-employed income in excess of €5,000 but who have no net liability to tax, the Class S flat rate of payment is being increased from €157 to €310.

 

Income bands and subclasses

 

Subclasses
A0
A6, A8, B0, C0, D0 & H0
Weekly
€38 to €352
up to and including €352
Fortnightly
€76 to €704 ( see note below)
up to and including €704
Monthly
€165 to €1,525 ( see note below)
up to and including €1,525

Note: This threshold only applies to Class A employees, whose total earnings/income, including if appropriate share-based remuneration, in each week of the fortnight or month are at least €38.

Subclass
AX
Weekly
€352.01 to €356
Fortnightly
€704.01 to €712
Monthly
€1,525.01 to €1,543

 

Subclass
AL
Weekly
€356.01 to €500
Fortnightly
€712.01 to €1,000
Monthly
€1,543.01 to €2,167

 

Subclasses
A7, BX, CX, DX and HX
A9
JO, M, and SO
Weekly
€352.01 to €500
more than €352
up to and including €500
Fortnightly
€704.01 to €1,000
more than €704
up to and including €1,000
Monthly
€1,525.01 to €2,167
more than €1,525
up to and including €2,167

 

Subclass
A1 and A4
Weekly
more than €500
Fortnightly
more than €1,000
Monthly
more than €2,167

 

Subclass
K1
Weekly
more than €100
Fortnightly
more than €200
Monthly
more than €433

This advance notice of PRSI changes for computer users is available on our website at www.welfare.ie or through our PRSI mailing list. If you wish to add your name to our list, please register at www.welfare.ie.

PRSI contribution rates from 1 January 2013

Private And Some Public Sector Employments
Non-Cumulative Weekly Earnings Band PRSI Subclasses How Much Of Weekly Earnings Employee %
( See note below)
Employer % Employee & Employer %
Up to €37.99
J0
ALL
0
0.50
0.50
€38 - €352
AO
ALL
0
4.25
4.25
€352.01 - €356
AX
ALL
4.00
4.25
8.25
More than €500
A1
ALL
4.00
10.75
14.75
€356.01 - €500
AL
ALL
4.00
10.75
14.75

 

Use the following subclasses (A6, A7 and A4) only for approved employees under the Employer's PRSI Exemption Scheme and Employer Job (PRSI) Incentive Scheme.
Non-Cumulative Weekly Earnings Band PRSI Subclasses How Much Of Weekly Earnings Employee %
( See note below)
Employer % Employee & Employer %
Up to €352
A6
ALL
0
0
0
€352.01 - €500
A7
ALL
4.00
0
4.00
More than €500
A4
ALL
4.00
0
4.00

 

Use the following subclasses for Community Employment participants.
Non-Cumulative Weekly Earnings Band PRSI Subclasses How Much Of Weekly Earnings Employee %
( See note below)
Employer % Employee & Employer %
Up to €352
A8
ALL
0
0.50
0.50
More than €352
A9
ALL
4.00
0.50
4.50

 

Class J normally relates to people with reckonable earnings of less than €38 a week (from all employments). However, the following employees are insurable at Class J, regardless of earnings: employees aged 66 or over and people in subsidiary employment.
Non-Cumulative Weekly Earnings Band PRSI Subclasses How Much Of Weekly Earnings Employee %
( See note below)
Employer % Employee & Employer %
Up to €500
J0
ALL
0
0.50
0.50
More than €500
J1
ALL
0
0.50
0.50
FÁS Allowance
J9
ALL
0
0.50
0.50
Office Holders
Non-Cumulative Weekly Earnings Band PRSI Subclasses How Much Of Weekly Earnings Employee %
( See note below)
Employer % Employee & Employer %
Up to €100
M
ALL
0
0
0
More than €100
K1
ALL
4.00
0
4.00

Class M relates to people with a nil contribution liability (such as employees under age 16 and persons in receipt of occupational pensions).

Ocupational Pensions
Non-Cumulative Weekly Earnings Band PRSI Subclasses How Much Of Weekly Earnings Employee %
( See note below)
Employer % Employee & Employer %
All income
M
ALL
0
0
0

 

Public Sector Employments - PRSI Class B
Non-Cumulative Weekly Earnings Band PRSI Subclasses How Much Of Weekly Earnings Employee %
( See note below)
Employer % Employee & Employer %
Up to €352
B0
All
0
2.01
2.01
€352.01 - €500
BX
All
0.90
2.01
2.91
More than €500
B1
Up to €1,443 inclusive
0.90
2.01
2.91
B1
Balance
4.00
2.01
6.01

 

Public Sector Employments - PRSI Class C
Non-Cumulative Weekly Earnings Band PRSI Subclasses How Much Of Weekly Earnings Employee %
( See note below)
Employer % Employee & Employer %
Up to €352
C0
All
0
1.85
1.85
€352.01 - €500
CX
All
0.90
1.85
2.75
More than €500
C1
Up to €1,443 inclusive
0.90
1.85
2.75
C1
Balance
4.00
1.85
5.85

 

Public Sector Employments - PRSI Class D
Non-Cumulative Weekly Earnings Band PRSI Subclasses How Much Of Weekly Earnings Employee %
( See note below)
Employer % Employee & Employer %
Up to €352
D0
All
0
2.35
2.35
€352.01 - €500
DX
All
0.90
2.35
3.25
More than €500
D1
Up to €1,443 inclusive
0.90
2.35
3.25
D1
Balance
4.00
2.35
6.35

 

Public Sector Employments - PRSI Class H
Non-Cumulative Weekly Earnings Band PRSI Subclasses How Much Of Weekly Earnings Employee %
( See note below)
Employer % Employee & Employer %
Up to €352
H0
All
0
10.05
10.05
€352.01 - €500
HX
All
3.90
10.05
13.95
More than €500
H1
All
3.90
10.05
13.95

 

Self-employed (on PAYE system only) - PRSI Class S
Non-Cumulative Weekly Earnings Band PRSI Subclasses How Much Of Weekly Earnings Employee %
( See note below)
Employer % Employee & Employer %
Up to €500
S0
All
4.00
0
4.00
More than €500
S1
All
4.00
0
4.00

Note: Share-based remuneration may, in certain circumstances, be subject to employee PRSI. Employers PRSI is not chargeable on share based remuneration.

Important points to note

  • There is no PRSI relief on pension contributions made by private sector employees.
  • PRSI relief on pension contributions paid by private sector employers remains unchanged.
  • Civil and public servants pay PRSI on the 'Pension levy' portion of their salaries.
  • Civil and public service employers do not have to pay any employer PRSI on the 'Pension levy'.
  • Employer and employee PRSI should be added together as normal. If a different subclass applies to the employee and to the employer, the return must always be made at the employee's subclass.
  • There is no annual earnings ceiling for PRSI for employees.
  • Class A employees earning between €38 and €352 inclusive a week should be recorded under Subclass AO.
  • Class A employees earning between €352.01 and €356 a week should be recorded under Subclass AX.
  • Class A employees earning between €356.01 and €500 a week should be recorded under Subclass AL.
  • For income of more than €500 a week, subclasses A1, A4, B1, C1, D1, H1, J1 and S1, as appropriate, should be returned.
  • Community Employment participants earning €352 or less a week should be recorded under Subclass A8. Subclass A9 applies when earnings are more than €352 a week.
  • The Class J contribution normally relates to people with reckonable earnings of less than €38 a week (from all jobs). However, a small number of employees are insurable at Class J, regardless of earnings - for example, employees over age 66 and people in subsidiary employment.
  • For employees taken on under the Employer's PRSI Exemption Scheme and the Employer Job (PRSI) Incentive Scheme:
    • Subclass A6 is applied to employees earning €352 or less a week - normally insurable at Subclass AO.
    • Subclass A7 is for those earning between €352.01 and €500 inclusive a week - normally insurable at Subclass AX or AL.
    • Subclass A4 applies for those earning over €500 a week. This applies to employees who would normally be insurable at Subclass A1 and exempted employees who were previously insured at Class A5.
  • You can download PRSI information booklets from our website at www.welfare.ie.

When completing a P35, P60 or P45, do not include any class or subclass of PRSI that did not apply during the year.

Last modified:07/12/2012
 

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