# PRSI at 4% will be payable by PAYE workers on deposit interest from 1st January 2014



## newseeker1 (20 Sep 2014)

Hi
Regarding the Budget 2013 announcement that PRSI at 4% will be payable by PAYE workers on deposit interest from 1st January 2014


That proposal was approved in the Finance Act after Budget 2013 - correct?
Will this be deducted at source same as DIRT or will you have to self declare it yourself
If you have to declare it yourself; how it that done; via Form 12
Would you be filling Form 12 out in 2015 to file in Oct 2015 relating to this for 2014 liability
Thanks


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## Joe_90 (20 Sep 2014)

newseeker1 said:


> Hi
> 
> 
> 
> ...


To be subject to PRSI on unearned income you have to be a chargeable person so have non PAYE income of €3,174.


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## newseeker1 (21 Sep 2014)

Thanks for the reply and information 
Is the PRSI deducted on the Gross Interest amount or the net interest amount remaining after DIRT has been taken.  
I'm assuming it would be on the former - the gross interest amount :-( 

Also, is it in 2015 that you have to declare this via Form 11 and pay this for the 1st time; for interest received in 2014?
Thanks


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## dub_nerd (21 Sep 2014)

Yes, it's on gross. Yes, declare it on next year's form for this year. (I paid it this year for the first time due to not being PAYE last year).


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## MrEarl (22 Sep 2014)

More unnecessary complication from our tax system 

They should be open with the population and charge DIRT at 45% if thats what they need to do, rather than try to disguise the extra 4% grab and in the process, add confussion which the tax payer is liable for any mistakes regarding.


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## Bronte (22 Sep 2014)

MrEarl said:


> More unnecessary complication from our tax system
> 
> They should be open with the population and charge DIRT at 45% if thats what they need to do, rather than try to disguise the extra 4% grab and in the process, add confussion which the tax payer is liable for any mistakes regarding.


 
Agreed, the beauty of DIRT was that was the end of the matter.


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## dub_nerd (22 Sep 2014)

MrEarl said:


> More unnecessary complication from our tax system
> 
> They should be open with the population and charge DIRT at 45% if thats what they need to do, rather than try to disguise the extra 4% grab and in the process, add confussion which the tax payer is liable for any mistakes regarding.



True, especially since the "PRSI" doesn't even count towards any of the meagre benefits that PRSI contributions at class A or S do. 

On the other hand, at prevalent interest rates you probably need 150k in the bank before you become chargeable due to deposit interest alone. I find I'm not even bothering to chase the best interest rates any more. At 45% tax on paltry interest rates it's hardly worth the time and effort to chase a few extra tenths of a per cent.


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## newseeker1 (24 Sep 2014)

Thanks for the replies and information 
So how would you would it out your liability for this
Would it be 
- Get Income certs for deposit accounts you have from financial institutions for 2013
- Add up the gross interest received on them
- If the gross interest is 3174 or higher (fat chance...
- Get 4% of the gross total 
- That's your liability due to revenue

Is that it?
Thanks


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## dub_nerd (24 Sep 2014)

Yes, that's right. Remember it's not just DIRT that adds to the 3,174 threshold, but all "unearned income", e.g. rental income.

If you fill out Form 11 on ROS, the system does the calculation for you.


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## theresa1 (25 Sep 2014)

Put your money in DIRT FREE State Savings Products - 3,4,5.5,6 and 10 year products.


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## Jetblue (25 Sep 2014)

" Remember it's not just DIRT that adds to the 3,174 threshold, but all "unearned income", e.g. rental income."

Unearned Income.....Does that include income from the Rent a room scheme?


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## MysticX (28 Sep 2014)

welfare.ie has a section on this for those of you who might be interested:
https://www.welfare.ie/en/Pages/Fre...-Broadening-of-the-Income-Base-for-PRSI-.aspx



> In Budget 2013 it was announced that from 1 January 2014, the exemption from PRSI applying to employed contributors and occupational pensioners under state pensionable age whose only additional income is unearned income, will be abolished.





> This means that unearned income such as rental income, investment income, dividends and interest on deposits and savings will be liable to PRSI.





> Interest on deposits and savings is currently liable to DIRT (increased to 41% from 2014 as announced by the Minister for Finance in his Budget 2014 speech). This income will now also become liable to PRSI at 4% for the above persons provided the person is a chargeable person in accordance with the Revenue definition as detailed below.



Regarding a chargeable person:


> 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 fully taxed through the Revenue Commissioners PAYE system (Revenue regard amounts not exceeding €3,174 as insignificant. Individuals with income exceeding €3,174 must pay and file under Revenue's self-assessing system).



I guess the chargeable person criteria is stop Revenue from getting flooded by self returns from individuals who otherwise wouldn't need to file. 

That said for an ordinary PAYE worker the €3,174 is a good sized buffer to hold a good chunk of savings in easy to access accounts while keeping the surplus in longer term savings that don't breach the ceiling such as state savings or perhaps even funds like Zurich or Standard Life if you're into investment.


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## mandelbrot (28 Sep 2014)

Jetblue said:


> " Remember it's not just DIRT that adds to the 3,174 threshold, but all "unearned income", e.g. rental income."
> 
> Unearned Income.....Does that include income from the Rent a room scheme?



No it doesn't include rent a room income.


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## Passport1 (12 Oct 2015)

I tryng to get idea what would be the figure owing to revenue  If you had un-earned income of circa 5k for 2014 (interest received from savings and investments)
Whats the formula to work out what you owe?
Thoughts


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## The Ghoul (12 Oct 2015)

Passport1 said:


> I tryng to get idea what would be the figure owing to revenue  If you had un-earned income of circa 5k for 2014 (interest received from savings and investments)
> Whats the formula to work out what you owe?
> Thoughts


I think it is simply a case of getting 4% of the pre DIRT interest? If your 5000 euros is post DIRT, divide 5000 by 0.59 first and then work out 4% of that.


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## dub_nerd (12 Oct 2015)

Passport1 said:


> I tryng to get idea what would be the figure owing to revenue  If you had un-earned income of circa 5k for 2014 (interest received from savings and investments)
> Whats the formula to work out what you owe?
> Thoughts


What sort of investments? If it's all earnings from deposit interest that incurred DIRT then you owe Revenue an additional 4% PRSI on the total before DIRT (or use The Ghoul's formula above on the post-DIRT total to calculate the pre-DIRT total first ... although you should be able to get that number from your bank statements). If you are talking about other sorts of investments you may be liable for income tax or Capital Gains Tax as well.


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## Passport1 (13 Oct 2015)

Thanks for replies
Its earnings from Deposit Interest
I have the Income Certs for 2014 that list the gross interest and the net interest (after DIRT deductions)
Figure above of 5k is the gross interest
So am I paying the 4% on the Gross interest figures of 5k or the Net Interest (after DIRT deductions) ?
Thanks


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## dub_nerd (13 Oct 2015)

4% on the Gross interest figures of 5k, i.e. €200.


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