McEvoy and Associates Frequently Asked Tax Questions
Frequently Asked Tax Questions
When do I start to pay income tax?
You will normally start to pay tax from your first payday. The amount of tax you pay depends on your level of pay, your standard rate cut-off point and the amount of your tax credits
What do I pay tax on?
You pay tax on earnings of all kinds arising from your employment including bonuses, overtime, non-cash pay, also known as benefit-in-kind e.g. use of company car, tips, Christmas boxes etc.
You do not pay tax on:
- Scholarship Income
- Interest from Savings Certificates
- Interest from Savings Bonds
- Interest from National Installment Savings Schemes with An Post
- Payments to approved Pension Schemes
Tax Credits for 2011
Employee PAYE Tax Rate:
You are exempt from paying PAYE tax up to the value of €16,500.
You are required to then pay 20% of tax up to the value of €32,800.
For anything higher than €32,800 the tax rate is then 41%.
Employee PRSI Tax Rate:
You are exempt from paying PRSI up to €127 per week.
For anything higher you are required to pay 4%.
Self-Employed/ Company Directors PRSI tax rate frequently :
You are required to pay 4%.
Universal Social Charge:
0% on the first €4004
2% on €0- €10,036
4% on €10,037- €16,016
7% on excess over €16,016
How will I know if I can claim tax back?
Form 12
At the end of each tax year your employer must give you a certificate of Pay, Tax and PRSI deducted during the year. This certificate is called a Form P60 and comes in two parts. It is your record of:
- The pay you received from your employer
- The tax deducted under PAYE and
- The PRSI contributions deducted.
From this you can then see if you are eligible to claim any income tax back. Other common expenses that are tax refundable are medical expenses, bin charges, rent tax credit and employment “flat rate” expenses