Class A employment
pay threshold to determine whether employees pay PRSI at Class A or J remains at
- Employees paid €38 to €352 inclusive in any week should be recorded under subclass AO.
- Employees paid €352.01 to €356 inclusive in any week should be recorded under subclass AX.
- Employees paid €356.01 to €500 inclusive in any week should be recorded under subclass AL.
Employer's PRSI on those earning less than €356 a week or equivalent has been halved.
- In any week that the employee is paid more than €500, it should be recorded under subclass A1 or A2 where appropriate. As a result of the Health Contribution being abolished, Subclass A2 no longer exists but has been retained in this guide so that significant changes to payroll systems are not required in moving from 2010 to 2011. For example, those paying Subclass A2 previously will continue to pay Subclass A2 in 2011(assuming their wages remain the same).
- Please note that where an employee was not recorded previously under Subclass A2 (when they earned more than €500 in any week), they should be recorded under Subclass A1 in any week that they earn more than €500 in 2011.
- Participants in Community Employment who are paid €352, or less in any week should be recorded under Subclass A8. In any week that the pay is more than €352 record under subclass A9.
- Community Employment supervisors and employees on apprenticeship schemes are insurable at Class A in the normal way.
Class J employment
- The Class J contribution normally relates to people paid 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 in Section 14).
- As a result of the Health Contribution being abolished, subclasses B2, C2, D2, H2, J2 and S2 no longer exist but they have been retained in this guide so that significant changes to payroll systems are not required in moving from 2010 to 2011. For example, those paying Subclass B2 in 2010 will continue to pay B2 in 2011 (assuming their wages remain the same).
- Please note that where an employee was not recorded previously under subclasses B2, C2, D2, H2, J2 and S2, (when they earned more than €500 in any week), they should be recorded under the relevant subclass (B1, C1, D1, H1, J1 or S1), in any week that they earn more than €500 in 2011.
- Class B, C, D or H employees paid up to €352 inclusive in any week should be recorded under subclass BO, CO, DO or HO.
- Class B, C, D or H employees paid between €352.01 and €500 inclusive should be recorded under subclass BX, CX, DX or HX.
- For people covered under Class J, S or K, and paid up to €500 inclusive in any week, record under subclass O, that is, JO, SO or Class M (for people within Class K) as appropriate.
- PRSI classes B, C and D will pay PRSI at 0.9% up to €1,443 a week and 4% above €1,443 a week. li>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’.
- The Class S rate has increased from 3% to 4%. The minimum annual contribution for Class S remains at €253.
Components of the PRSI contribution
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 and PRSI Class of the employee and benefits for which he or she is insured.
- the 0.70% National Training Fund Levy, included in the employer’s contribution in Classes A and H.
Levels of Payment
PRSI contributions will be payable as follows:
- at the appropriate percentage rates for employees on
all reckonable earnings.
all reckonable pay, the employer’s share (social insurance and the 0.70% National Training Fund Levy in classes A and H) is due.
- Class S, social insurance at 4.00% on
all reckonable income.
The National Training Fund Levy are included in the contribution rates outlined in sections 2 - 10 where applicable.
PRSI is calculated on the employee’s reckonable pay. Reckonable pay is the gross money pay
plus notional pay (or benefit in kind) if applicable. For 2011 reckonable pay is
not 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. Reckonable pay for the purposes of employer contributions is calculated as gross money pay plus notional pay (or benefit in kind) if applicable -
reduced by half of any 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. In the case of civil and public servants, reckonable pay includes ‘pension levy’. However, ‘pension levy’ deductions are not included in reckonable pay for the purposes of calculating employer contributions.
In some limited cases the above arrangements may result in the reckonable pay of employees and employers attracting different subclasses. Where this occurs the following should be noted:
- If a Class A employee has pay of €360 and, from this pay, makes a pension contribution of €30, the ‘employer reckonable pay’ is €345.
- As the employee falls into Subclass AL, employee PRSI is calculated at this subclass.
- As the employer falls into Subclass A0, employer PRSI is calculated at this subclass.
- The amounts should then be added together as normal but
the return must always be made at the employee subclass, in this example, AL.
PRSI-Free Allowance for employees
The PRSI-Free Allowance remains at €127 per week (per individual employment) for employees with weekly reckonable pay of more than €352 in Classes A and H, and at €26 for all employees in Classes B, C and D. The allowance is non-cumulative, so it only applies for weeks of insurable employment in which PRSI is payable (see
“holiday pay” in Section 14). 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 in sections 2 to 10 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:
PRSI contribution weeks
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 2011, 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 is in insurable employment.
People who were insured at Classes A, B, C, D, H or S and who are no longer insurably employed 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 more information, log on to www.welfare.ie or contact:
Voluntary Contribution Section
1890 690 690 (from the Republic of Ireland only)
00 353 1 4715898 (from Northern Ireland or overseas)
Pension Contributions and PRSAs
Relief from PRSI in respect of payments by employees to their own pensions and PRSAs has been abolished. Employees now pay PRSI on payments they make to their pensions or PRSAs. Employers PRSI is payable on half of the employee payment to the pension or PRSA. Contributions by employers to employee pensions and PRSAs do not attract the charge to either employee or employer PRSI.
A separate notice will deal with issues relating to PRSI and shares, employer PRSI paid to date in respect of share based income, and PRSI paid to date in respect of employer PRSA contributions.