Advance Notice of PRSI Changes For Computer Users 2015


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

 

2015
Advance notice of PRSI changes for computer users

 

There were no PRSI changes announced in the October 2014 Budget.

Employee PRSI

There are no changes in employee rates of PRSI.

Self-employed Payments

There are no changes to the rate of self-employed PRSI or in the minimum/flat rate self-employed PRSI payments.

Employer PRSI

There are no changes in employer rates of PRSI.

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.

General PRSI Information

Maternity Benefit, Adoptive Benefit and Health and Safety Benefit

From 1 July 2013, Maternity Benefit, Adoptive Benefit and Health and Safety Benefit payments are taxable in full. These benefits are exempt from USC and PRSI. Individuals who pay their tax through the PAYE system will, where possible, automatically have their annual tax credits and rate bands reduced by the amount of these payments. Revenue will receive details of the benefit from the Department of Social Protection. Employers will be advised by the Revenue Commissioners of the adjusted tax credits and rate bands on employee tax credit certificates.

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.
  • Certain public 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 K1.
  • From 1 January 2013, Class K also applies to the additional earned self-employed income from a trade or profession of a modified rate contributor and on any unearned income they may have.
  • From 1 January 2014, Class K may also apply to the unearned income of employed contributors and occupational pensioners (whether that pension arises from that person's own employment or the employment of his or her spouse or civil partner) aged under 66 years of age where this is the only additional income. This means that unearned income such as rental income, investment income, dividends and interest on deposits and savings may be liable to PRSI.
  • 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

There is no employee PRSI-free allowance. Once weekly earnings exceed the threshold at which PRSI is chargeable, PRSI is calculated on all the earnings.

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 is €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 €310.

Broadening of the income base on which PRSI is charged

In Budget 2013 it was announced that the income base on which PRSI is charged would be broadened to include sources of income on which PRSI was previously not chargeable. This was implemented in 2 phases.

2013 Changes - Modified Rate Contributors

In 2013, the non-employment income of modified rate employees (Classes B, C and D) became subject to PRSI at 4%.

From 1 January 2013, PRSI is chargeable on all additional non-employment income of modified rate employees, where that employee has earned self-employed income (from a profession or trade) and the tax on that income is collected through the Revenue Commissioner' self-assessed system.

Since 28 June 2013 PRSI is chargeable on all self-employed income of modified rate employees which comes within the PAYE system and is deducted at source.

The PRSI paid is classified for the purposes of recording the contribution under PRSI Class K. Class K contributions do not give entitlement to any social insurance benefits based on the payment of that PRSI charge. Individuals may however qualify separately for social insurance entitlements based on PRSI paid on other sources of income i.e. PRSI paid on income from their employment.

For more information, log on to www.welfare.ie.

2014 Changes - Employees/Pensioners under 66 years with unearned income only

From 1 January 2014, PRSI is chargeable on certain additional unearned income where the individual is:

  • an employee or an occupational pensioner under 66 years (whether that pension arises from that person's own employment or the employment of his or her spouse or civil partner) and
  • where the unearned income is the only additional source of income and it is taxable under the Revenue Commissioners' self-assessed system and
  • the individual is a "chargeable person" for income tax purposes.

Note: This measure will not affect those who have already reached pension age and are therefore exempt from PRSI.

A "chargeable person" for Revenue purposes is generally a person who has income in excess of €3,174. A "chargeable person" does not include a PAYE taxpayer (i) who does not have other income, or (ii) who has an element of other insignificant income that is already fully taxed through the Revenue Commissioners PAYE system. Revenue regard amounts not exceeding €3,174 as insignificant.

The PRSI paid is classified for the purposes of recording the contribution under PRSI Class K. Class K contributions do not give entitlement to any social insurance benefits based on the payment of that PRSI charge. Individuals may however qualify separately for social insurance entitlements based on PRSI paid on other sources of income i.e. PRSI paid on income from their employment.

For more information, log on to www.welfare.ie
(www.welfare.ie/en/Pages/Frequently-Asked-Questions-on-the-Broadening-of-the-Income-Base-for- PRSI-.aspx)
(www.welfare.ie/en/Pages/Information-on-the-Extension-of-PRSI-Liability-to-Unearned- Income.aspx)

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 (Office Holders only) (See note below)
Weekly
more than €100
Fortnightly
more than €200
Monthly
more than €433

*Note: Class K1 refers to Office Holders only and does not refer to any other Class K contributions paid.

 

PRSI contribution rates from 1 January 2015

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
JO
ALL
0
0.50
0.50
€38 - €352
AO
ALL
0
8.50
8.50
€352.01 - €356
AX
ALL
4.00
8.50
12.50
€356.01 - €500
AL
ALL
4.00
10.75
14.75
More than €500
A1
ALL
4.00
10.75
14.75

 

Use the following subclasses (A6, A7 and A4) only for existing approved employees under the Employer Job (PRSI) Exemption 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 existing employees taken on under the Employer Job (PRSI) Exemption 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.
    • This scheme is closed for new applicants. The original scheme will remain in place for existing employees for the duration specified at the time of award.It has been replaced by the JobsPlus scheme, details of this scheme are available at www.jobsplus.ie. For participants in the JobsPlus scheme the appropriate rates of PRSI apply to both the employer and the employee.
  • 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:15/10/2014
 

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