A Guide to PAYE for Employees
- What is PAYE
- Important PAYE documents
- Tax credits
- Tax Credit Certificate
- Universal Social Charge (USC)
- PAYE Anytime
- Changing jobs
- Tax credits 2010/2011
- Contact us
- PAYE anytime using your mobile phone
PDF Version of A Guide to PAYE for Employees (PDF, 695KB)
What is PAYE?
As an employee your tax is taken from your pay by your employer.
This is known as PAYE or Pay As You Earn.
PAYE ensures that the yearly amount of tax that you have to pay is collected evenly throughout the year on each payday.
How does your employer know how much tax to collect?
At the start of each year, Revenue sends your employer a notice that gives the necessary details needed to work out your correct tax. This notice includes any changes to tax that were made in the most recent Budget.
The details in the notice are based on the information about your personal circumstances that you gave to Revenue. When there is a change in your personal circumstances that affects the tax you pay; for example, if you get married, you need to tell Revenue. Revenue will then send your employer a new notice to calculate the new amount of tax you should be paying. A separate more detailed notice is sent to you.
How does Revenue look after your personal information?
We give your employer only the information needed to calculate the tax you pay. All other personal information you give Revenue remains confidential between you and Revenue.
Important PAYE Documents
Tax Credit Certificate
The certificate that shows your tax credits and rate band. This certificate is made available through numerous channels, by
- logging on to PAYE Anytime (you need to be registered with Revenue to use this service)
- by texting your PPS number and the word ‘cert’ to 51829 (effective from 1 January 2011)
- ringing our 1890 LoCall service.
P60
The certificate that your employer gives to you at the end of the year. It shows your pay, and the tax and PRSI deducted by your employer during the year.
P45
The form that your employer gives to you when you leave your job. It shows what you were paid and the tax and PRSI for the year up to your date of leaving.
Tax credits
What are tax credits?
Tax credits are credits that you get based on your personal circumstances, e.g. single or married, and which are set against your income for the year. A tax credit reduces the tax you pay on your income. Some credits are fixed amounts, like the single or married person’s credit; others depend on the amount you spend, like tuition fees.
Later in this booklet we show you the main tax credits.
Full details of all tax credits are available on Revenue’s website www.revenue.ie.
How do they work?
Under PAYE your tax credits are spread across the number of paydays you have in the year. This reduces the tax you pay every payday.
Tax credits reduce your tax
For example:
Mary is paid a weekly amount of €600
Taxable at 20% €120
Less weekly tax credits €70
Tax to be paid this week €50
Tax credits mean more money in your pocket!
Whether or not you work every week or month in the year, you will still be entitled to your full year’s tax credits. For example, if you didn’t start work until July, the tax credits you didn’t use for the first half of the year will be carried forward and used on each following payday until the year ends.
What tax credits do I already have?
You can see what tax credits you already have by checking your tax credit certificate.
How do I claim tax credits?
If your personal circumstances entitle you to claim a tax credit, the easiest and fastest way to claim is to use PAYE Anytime, or alternatively contact your local Revenue office.
Do I have to claim my tax credits every year?
In most cases, when you claim a tax credit Revenue automatically gives it every year. It will be shown on your tax credit certificate. However, if you are no longer eligible to claim the tax credit it is important that you contact Revenue.
Is there a time limit on claiming tax credits?
There is a four-year time limit for claiming tax credits. It is important that you claim in time or you could lose out.
The most common tax credits
- Single or Married
- Widowed and One-Parent Family
- Home Carer
- Incapacitated Child
- Dependent Relative
- PAYE
- Work-related expenses (such as uniforms)
- Age tax credit for 65 and over
- Rent paid to a private landlord
- Tuition fees
If you are aged 65 or over you might not have to pay tax on your deposit interest (interest you earn on your savings). Ask your bank, building society or credit union for more information.
Don’t Forget
Tax relief on mortgage payments and medical insurance
The tax relief for paying home mortgage interest is given directly to you by the bank or building society you borrow from. You do not have to claim this tax relief from Revenue and it does not appear on your tax credit certificate. Check with your bank or building society to make sure you are getting what you are due. The same arrangements are in place for medical insurance payments.
Did you pay any medical expenses during the year?
You may be due a tax refund!
If you paid medical or non-routine dental expenses during the year, and you have paid tax in that year, you can claim a tax refund.
To claim the refund:
- log on to www.revenue.ie and click PAYE Anytime, or
- fill in a form Med 1 (PDF, 888KB) and send it to your local Revenue office.
The form Med 1 is also available from any Revenue office.
Your Tax Credit Certificate
Your tax credit certificate shows the tax credits you are currently claiming and your rate band.
How is your tax calculated?
Here is an example of how the tax of a single person who is paid weekly is calculated:
(Example figures)
Gross pay €675 per week
Rate Band €630.77 weekly
Tax Calculation
Rate Band 630.77 taxed @ 20% = 126.15
Balance of pay 44.22 taxed @ 41% = 18.13
Gross Tax figure 144.28
Less weekly Tax Credits -63.47
Tax you pay now reduced to 80.81
This example is for a person who is paid weekly. If you are paid fortnightly or monthly the same principles will apply.
If there is a change in your personal circumstances that affects the tax you pay, you need to tell Revenue. This could happen, for example, if you started work in a job where you can claim work-related expenses for a uniform. Revenue will then send you a new tax credit certificate that includes the changes. Revenue will give your employer the details needed to deduct the correct tax from your pay.
You can get your tax credit certificate by:
- logging on to PAYE Anytime
- by texting your PPS number and the word ‘cert’ to 51829 (effective from 1 January 2011)
- ringing our 1890 LoCall service.
Universal Social Charge (USC)
The Universal Social Charge (USC) comes into effect on 1 January 2011 and replaces the Health Levy (paid as part of your PRSI deductions) and Income Levy which are abolished from that date. The USC is a tax payable on gross income, including benefits from your employer, but before deducting your pension contributions. Your employer will deduct the USC from your earnings on a pay period by pay period basis.
Who is exempt from paying the USC?
Individuals whose annual income does not exceed €4,004
Unlike the Income Levy, medical card holders are liable for the USC.
| Per Year | Rate of USC |
Per Week | Per Month |
|---|---|---|---|
| Up to €10,036 | 2% | Up to €193 | Up to €837 |
| From €10,036.01 to €16,016 | 4% | From €193.01 to €308 | From €837.01 to €1,335 |
| In excess of €16,016 | 7% | In excess of €308 | In excess of €1,335 |
Persons aged 70 years and over, and *persons in possession of a Full Medical Card (regardless of age):
| Per Year | Rate of USC |
Per Week | Per Month |
|---|---|---|---|
| Up to €10,036 | 2% | Up to €193 | Up to €837 |
| In excess of €10,036 | 4% | In excess of €193 | In excess of €837 |
Employers will deduct the USC from payments they make to their employees on a pay period by pay period basis.
New USC Certificate
This is the certificate your employer will give you (with your P45) when you leave your job during the year. This certificate is your personal record of your USC deductions while in the employment. You should retain it carefully. It is not necessary to send this certificate to Revenue or to give it to your new employer.
*As a result of Finance Act 2011 individuals in possession of a full medical card will only pay Universal Social Charge at a maximum rate of 4% irrespective of the level of their income from employment/pension.
Full information on the Universal Social Charge (USC).
PAYE Anytime
The quickest and easiest way to keep your tax up to date is to use PAYE Anytime.
PAYE Anytime is a secure online internet system that lets you do business with Revenue electronically 365 days a year.
You can
- Claim a wide range of tax credits
- Look at your own tax record
- Request a review for the past 4 years
- Claim a repayment for items such as medical expenses
- Tell Revenue about any additional income.
Benefits
- This is quick, easy, free and secure
- Immediate update of your tax credits
- Faster repayments
- Track the requests and information that you send to Revenue.
To use PAYE Anytime, you must register first. Registration is quick and easy.
How to register for PAYE Anytime
- Register for PAYE Anytime.
- Fill in your personal details,including your PPS number, your address and your contact details
- Click ‘Continue’ to submit your details.
In a few days, you will receive your Revenue PIN in the post.
Then you can start using PAYE Anytime.
It is important not to give your PAYE Anytime details to anyone. Beware of bogus contacts as Revenue will never contact you to confirm such information. If you are in any doubt, please contact us immediately.
What you need to know about changing jobs
Remember your P45
When you leave a job, your employer gives you a form P45. This shows your pay, tax and PRSI for the year up to the day you leave. Your new employer needs this form to deduct the correct amount of tax.
If you do not give your new employer a P45, you may end up paying too much tax.
Your new employer will arrange to get a new tax credit certificate for you so that the correct tax continues to be deducted from your pay.
USC Certificate
When you leave a job your employer will also give you a Universal Social Charge (USC) certificate which is your personal record of your USC deductions while in the employment. You should retain it carefully. It is not necessary to send this certificate to Revenue or to give it to your new employer.
What if I am out of work for a while
If you are out of work and have paid tax during the year, you may be entitled to claim a tax refund.
When do I apply for a tax refund?
If you are unemployed, wait at least 4 weeks from the date you became unemployed.
If you have another taxable source of income, such as Jobseeker’s or Illness Benefit from the Department of Social Protection, wait at least 8 weeks from the date you became unemployed.
If you paid emergency tax, you can apply immediately for a tax refund.
How do I apply for a tax refund?
To claim the refund, you need a form P50. It is available from www.revenue.ie or from any Revenue office. Fill in the form P50 and send it along with your P45 to your local Revenue office.
Tax Credits
Here is a list of the main tax credits and their values for 2010 and 2011 as announced in the Budget.
Full list of tax credits is available at www.revenue.ie.
| Tax Credit | Tax Year 2010 | Tax Year 2011 |
|---|---|---|
| Single Person | €1,830 | €1,650 |
| Married Person | €3,660 | €3,300 |
| PAYE Credit | €1,830 | €1,650 |
| Widowed Person without dependent children | €2,430 | €2,190 |
| One Parent Family Tax Credit | €1,830 | €1,650 |
| Incapacitated Child (Max) | €3,660 | €3,300 |
| Blind Tax Credit – Single | €1,830 | €1,650 |
| Blind Tax Credit – One Spouse Blind | €1,830 | €1,650 |
| Blind Tax Credit – Both Spouses Blind | €3,660 | €3,300 |
| Widowed Parent Bereaved in 2010 | — | €3,600 |
| Widowed Parent Bereaved in 2009 | €4,000 | €3,150 |
| Widowed Parent Bereaved in 2008 | €3,500 | €2,700 |
| Widowed Parent Bereaved in 2007 | €3,000 | €2,250 |
| Widowed Parent Bereaved in 2006 | €2,500 | €1,800 |
| Widowed Parent Bereaved in 2005 | €2,000 | — |
| Age Tax Credit if Single/Widowed | €325 | €245 |
| Age Tax Credit if Married | €650 | €490 |
| Dependent Relative | €80 | €70 |
| Home Carer | €900 | €810 |
| Rent Tax Credit – Single, under 55 | €400 | €320 |
| Rent Tax Credit – Married or Widowed, under 55 | €800 | €640 |
| Rent Tax Credit – Single, 55 or over | €800 | €640 |
| Rent Tax Credit – Married or Widowed, 55 or over | €1,600 | €1,280 |
| Trade Union Subscriptions | €70 | Nil |
| Tax Credit | Tax Year 2010 | Tax Year 2011 |
|---|---|---|
| Employing a Carer (Allowed at your top rate of tax) |
€50,000 | €50,000 |
Service charges
If you paid bin charges or local authority service charges in the previous year, you can claim a tax credit of up to €80. What you paid in 2010, you can claim in 2011.
This relief is not available for service charges paid after 2010.
Contact us
The Revenue PAYE LoCall 1890 phone Service operates from Monday to Friday. Don’t forget to have your PPS number handy to save time.
| Region | Area Covered | Telephone No. |
|---|---|---|
| Border Midlands West Region | Cavan, Monaghan, Donegal, Mayo, Galway, Leitrim, Longford, Louth, Offaly, Roscommon, Sligo, Westmeath | 1890 777 425 |
| Dublin Region | Dublin (City and County) | 1890 333 425 |
| East & South East Region | Carlow, Kildare, Kilkenny, Laois, Meath, Tipperary, Waterford, Wexford, Wicklow | 1890 444 425 |
| South West Region | Clare, Cork, Kerry, Limerick | 1890 222 425 |
The actual cost of calls to these LoCall 1890 numbers varies depending on your phone company and calls made using mobile phones may be expensive. It is recommended that you only ring these numbers from a landline.
If you are calling from outside the Republic of Ireland please phone + 353 1 702 3011.
Persons with a disability who wish to access Revenue’s services should contact accessofficer@revenue.ie.
PDF Version of A Guide to PAYE for Employees (PDF, 696KB)
This leaflet is intended to describe the subject in general terms. As such, it does not attempt to cover every issue which may arise in relation to the subject. It does not purport to be a legal interpretation of the statutory provisions and consequently, responsibility cannot be accepted for any liability incurred or loss suffered as a result of relying on any matter published herein.