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Pay Related Social Insurance/Universal Social Charge

Pay Related Social Insurance (PRSI) is payable by employers, employees and Self-employed persons.

Employers and employees pay PRSI on the employee’s salary after deduction of any contributions to an approved pension scheme.

Employers and employees PRSI is charged on all earnings from employments, including benefits in kind.

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Contributions

 USC rates for 2016

  USC <70 no medical card USC > 70 USC <70 with medical card
Up to €12,012 1.5% 1.5% 1.5%
Next €6,656 3% 3% 3%
The next €51,376 5.5% 3% if less than €60,000,If > €60,000 5.5% 3% if less than €60,000,if > €60,000 5.5%
The balance 8% 8% 8%
>€100,000* 11% 11% 11%
  • Applies to self-employed only, if income in excess of €100,000 for an employee the 8% rate applies.

USC rates for 2017

USC <70 no medical card USC > 70 USC <70 with medical card
Up to €12,012 0.5% 0.5% 0.5%
Next €5,564 2.5% 2.5% 2.5%
€17,576 to €70,044 5% 2.5% if less than €60,000,If > €60,000 5% 2.5% if less than €60,000,if > €60,000 5%
€70,045 to €100,000 8% 8% 8%
>€100,000* 11% 11% 11%
  • Applies to self-employed only, if income in excess of €100,000 for an employee the 8% rate applies.

 

PRSI applies at a rate of 4%. Employees earning €352 or less per week are exempt from PRSI.

PRSI applies to non-employment income of employees.

There is a minimum annual PRSI contribution of €500 for self employed individuals.

 

Employer Contributions:

PRSI               10.75%    ALL income

                           8.5%%   If Income €365 per week or less

Employee pension contributions do not qualify for PRSI or USC relief.

From 2016 employer contributions to a Personal Retirement Savings Accounts (PRSA) in respect of an employee will no longer attract a USC liability for the employee.

Employee and employer PRSI and the Universal social charge apply to all free share awards.

 

USC

Certain limited deductions are allowed against the USC, these include;

  • Trade Losses and capital allowances
  • Business and rental expenses
  • Legally enforceable maintenance payments

 

Exemptions from the USC

  • Individuals with a total income of less than €13,000
  • The tax free element of a termination payment will be exempt from the USC.
  • Statutory Redundancy
  • Salary and pension payments made under a PAYE exclusion order to individuals resident in a treaty country.
  • Social welfare payments
  • Deposit interest
  • Payments made by a spouse under a legally enforceable maintenance agreement, there is no exemption for any element of the payment relating to children
  • Payments made where an exclusion order is in place

 

Employees PRSI

PRSI is charged on all earnings from employment including non-pecuniary income (benefits in kind). Other allowable deductions are contributions paid to an approved superannuation scheme.

In general, persons between 16 and 66 years, in insurable employment, must pay PRSI.

PRSI
Up to 1 January 2014 there was an exemption from PRSI for employed individuals and pensioners. However from 1 January 2014 there is a 4% PRSI charge on investment and rental income for PAYE taxpayers where their non PAYE income exceeds €5,000 (2015 – €3,174)

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Self-Employed

Self-employed persons are liable for PRSI contributions in respect of income from a trade or profession, or from investment income. If you receive employment income or pension income you are exempt from self-employed PRSI on investment income including deposit interest. The exemption is lost if you have self-employed earnings.

The minimum contribution payable for 2016 is €500. Payment must be included with preliminary tax which is payable on or before 31 October each year.

Self employed persons whose income from all sources is less than €3,174 for 2016 before deduction of capital allowances will not be liable to PRSI. This test is applied separately to the income of a husband and wife.

Self-employed individuals are liable to PRSI at 4% on their full reckonable earnings without any exemptions or any ceilings.

Employers PRSI

A two-tier system of employers’ contributions applies i.e.

  • where an employee earns less than €356 in any week a reduced rate of 8.50% applies.
  • where earnings exceed €356 in any week the full rate of 10.75% applies to all earnings for that week.

These rates are inclusive of the National Training Fund Levy of 0.7%. There is no ceiling on the level of earnings liable to employers PRSI.

All benefit in kind is subject to both employers and employees PRSI.

Domicile Levy

  • A €200,000 domicile levy applies to individuals who are both domiciled in and citizens of Ireland.
  • Their worldwide income must exceed €1m, and their liability to Irish tax must be less than €200,000.
  • The market value of Irish property owned by the individual on 31 December in the tax year exceeds €5m.
  • Where an individual is married, the levy could apply to both spouses.
  • Revenue have the power to issue notices requesting returns within 30 days.

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