Where an employees weekly pay fluctuates above and below €480, but the annual pay during 2007 is not more than €24,960, the employee may claim a refund of the 2% Health Contribution deduction or where an employees weekly pay fluctuates above and below €1,925, but the annual pay during 2007 is not more than €100,100, the employee may claim a refund of the 0.5% Health Contribution deduction from the
Telephone (01) 6732586
If you pay an employee for a period of more than a week, apply the relevant
PRSI -free allowance for each of the weeks involved. It is also important to determine the subclass correctly.
An employee receives two weeks holiday pay with a current week's wages. Three contributions are awarded, so the earnings should be averaged over 3 weeks to determine the correct
PRSI subclass, and three weeks
PRSI-free allowance (€127 x 3) should be applied. This arrangement also applies when an employer pays holiday pay when an employee leaves the employment.
Payment of Illness Benefit and Injury Benefit can now be made directly to your company where sick pay arrangements require the employee(s) to hand over Illness Benefit/Injury Benefit payments to their employers. The Illness Benefit Claim Form/First Medical Certificate (MC 1) now has a section where the employee can indicate that any payment(s) due can issue directly to the employer.
Completion of P45
Where an employee leaves his or her employment, a form P45 should be completed and given to the employee
immediately. The P45 is very important and may be required as evidence of entitlement to Social Welfare benefits.
Lump sum payments
Lump sum payments made to employees when they leave employment are not regarded as reckonable pay for
PRSI purposes. These include redundancy, gratuities, ex-gratia and pay in lieu of notice. However, a Class K contribution is paid on the taxable amount. If the lump sum is exempt from tax, it is exempt from
PRSI for the self-employed
People whose income is subject to
PAYE income tax but who are held not to be insurable as employees continue to be insurable at Class S. However, where their reckonable income
from all sources is less than €3,174 for year 2007, they will not be held to be insurable (see paragraph on Voluntary Contributions). In such cases, Class S should be applied during the year and contributors can apply for a refund of the
PRSI paid during that year after the end of the tax year. They can contact: Refunds Section, Tel: (01) 673 2586.
The minimum contribution under Class S is €253 for the year 2007. Where a self-employed person's total
PRSI deductions for the year are less than €253, they must pay any outstanding balance to the Department of Social and Family Affairs: Directors Unit, Self-Employment Section, Tel. (051) 356027.
Employers, who are personally liable for
PRSI under Class S, are required to register with the Department of Social and Family Affairs. A registration form SE3 is available for this purpose from: Self-Employment Section, Tel. (051) 356 000 or (01) 704 3000 Ext. 6003 to 6005.
National Training Fund Levy
The National Training Fund Levy of 0.70% is included in the employer's share of
PRSI under Class A and H, with no change in the overall rate payable by the employers.
Taxation of Jobseekers or Illness Benefit
Payments for child(ren) are excluded from the taxation of Jobseekers Benefit and Illness Benefit. In addition, the first six weeks of Illness Benefit is exempt from tax. This Department will notify you of the amount of Illness Benefit to be taken into account for tax purposes where appropriate. Taxation of Jobseekers Benefit will still be mainly applied by the tax office.
If you have any enquiries about taxation of benefits contact the local tax office :
LoCall 1890 60 50 90 (from within the Republic of Ireland).
A separated person may claim a refund of
PRSI on enforceable maintenance payments made to his or her spouse. The
PRSI due will be re-calculated on the reckonable pay/income reduced by the amount of maintenance payment. Any excess
PRSI paid will be returned by claiming a refund after year end, 31 December 2007,:
PRSI Refunds Sections),
Telephone 01 -6732586
Subsidiary employment, which is insurable at Class J regardless of earnings, is defined in legislation. It includes for example employment of people who are also insurable at Class B, C, D or H in their main employment.
Sheltered Workshop employment is not insurable under Social Welfare Acts as it is:
- Not regarded as being employment under a contract of service (in other words no employer or employee relationship involved).
- The allowance being paid is not "reckonable income" or "reckonable emoluments" for
- Employment in the open labour market where a normal employer/employee relationship exists is insurable at a Class A rate if weekly income is €38 or more and at a Class J rate if it is less than €38.
Personal Public Service Number (PPS No.)
It is vital that the correct
PPS No. is shown on your P35 end of year return for each employee. If you need assistance in tracing the
PPS No.(s) for your employee(s), please have them contact:
Client Identity Services, Tel. (01) 704 3281
Recording of contributions (End of year returns for 2007)
For the year 2007 and subsequent years, the gross pay on the form P35 (end of year return) for each employee should include any taxable benefit (notional pay) received by that employee during the year. In addition, the total amount of taxable benefits in the year for
all employees should be included in the appropriate section of the summary page of the P35.
The P35 should not include any class or subclass of
PRSI that did not apply during the tax year.
If the employee changes class (for example Class A0 and J0) an aggregate total of weeks for all classes should be included on the P35.
If more than two classes or subclasses are involved during the year, you should fill in a form PRC 1 (copy in your P35 Pack) or a computer printout in the same format showing the classes and number of weeks of insurable employment in each class or subclass.
You must use Form
P35 LT when the
PPS No. is unknown, but you still record the :
Date of Birth,
Mother's Birth Surname.
If you need help
A Ready Reckoner containing weekly calculations for Classes A, J, K and S and further information on
PRSI Rates for Employers and Employees is available on our website at
PRSI Ready Reckoner 2007
A range of information is now available for employers on our website
Employers Web Page
Other Useful Booklets
Employer's Guide to
Guide to Voluntary Contributions
Guide To Pay-Related Social Insurance
PRSI for Non-
PRSI Exemption Scheme
A Guide to
PRSI for the Self-Employed
Family Employments and