Income Taxes

About Income Taxes

Income taxes refers to three separate deductions from your income, Pay Related Social Insurance (PRSI), Universal Social Charge (USC) and Income Tax.

Each of these deductions is applied in different ways, with different rates, different reliefs and different exemption thresholds.

All income received by an individual (or at times a company) who is liable to tax in Ireland will be subject to Income Tax.

Liability to tax in Ireland is dependent on your tax status; this determines how much of your worldwide income (earned in Ireland and abroad) will be subject to tax in Ireland.

The main body of legislation governing the taxation of income is the Tax Consolidation Act 1997 (TCA 1997)

Rates of Income Taxes

  • Income Tax

20% on first € 33,800 and 40% on income above € 33,801

  • PRSI

The class and rate of PRSI is determined principally on whether you are employed or self-employed (including certain company director). Employees pay class A and certain Company Directors/ the Self-employed pay class S.

For employees the entry rate is 4% on weekly income exceeding €352, however a weekly credit is available to persons earning up to € 424 per week.

In the case of a class S contributor (certain Company Directors/ the Self-employed) the rate is also 4% however this is where the similarities with the class A contribution end.

Class S contributors are liable on earnings above €5,000 pa. Additionally in order to earn a fully year class S contribution the minimum annual payment is €500. If earnings are below €12,500 a voluntary contribution can be made of up to €500.

PRSI contributions at class A & S entitle you to certain Social Welfare benefits. The benefits available to class S contributors differ significantly from those available to class A contributors.

  • USC

This tax applies to persons with weekly income greater than €250.

The rate of USC increases in income bands starting at 1% (income up to 12,012 pa), to a maximum of 8% (income above €70,044) for employees and a maximum of 11% (income above €100,000) for self-employed individuals and certain company directors.

Due Dates

The tax year runs from January to December.

For example taking 2015 as the base year the key dates are:

  • 31st October 2015 Payment of Preliminary income tax for 31/12/2015
  • 31st October 2016 Filing of Income Tax for the tax year to 31/12/2015 and payment of Preliminary Tax for 31/12/2016

The payment and filing deadlines are extended to a date in early November, when using the Revenue on-line system [ROS] however payment must be made at the same time as filing your return.

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