# what is the minimum salary a director (ltd co) can pay himself for prsi purposes?



## Nicky (22 Aug 2008)

I am wondering what the minimum wage can pay director ltd. himself as he is an employee as well ?
Thank you


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## z103 (22 Aug 2008)

*Re: Minimum Director's wage*

Well as an S class director I was on zero euros for over a year. (Don't ever work for nothing BTW)


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## ClubMan (22 Aug 2008)

*Re: Minimum Director's wage*



Nicky said:


> I am wondering what the minimum wage can pay director ltd. himself as he is an employee as well ?
> Thank you


€8.65 an hour as an employee anyway.


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## Graham_07 (22 Aug 2008)

*Re: Minimum Director's wage*



leghorn said:


> (Don't ever work for nothing BTW)


 
If you are prepared to work for nothing you will never be unemployed


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## Nicky (23 Aug 2008)

*Re: Minimum Director's wage*

For example, I would like to do PRSI contribution for my state pension, should I pay myself as a director next
monthly payments: €8.65*8hours per day*5days a week*4weeks a month=€1384, then PRSI contribution
1384*8.5%=€117.64, PYAE =0, total costs= 1384+117.64=€1501.64 monthly and €18019.68 yearly ?
Is that correct ?
In other words can I have no salary or as little as can and make PRSI contribution at the same time ?
Thanks
Nicky


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## Cormi (24 Aug 2008)

*Re: what is the minimum wage a director (ltd co) can pay himself hes an employee as w*

If you were to pay yourself €8.65gross ph for 40 hours per week this would give you 346 gross per week, as you are a director you pay prsi at the s rate which is 5% i.e 17.30, and also as a director you are not given the paye credit so you are only entitled to personal credit of €1830(2008), therefore weekly this would give you tax payable of 34.01(346*20%=69.20-35.19weekly tax credit) this would give you a net take home wage of €294.69 per week. yearly figures Gross salary: 17992, Prsi 899.60 and tax of 1768.52 giving a net yearly wage of 15323.88.


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## Nicky (24 Aug 2008)

*Re: what is the minimum wage a director (ltd co) can pay himself hes an employee as w*

Thank you Cormi, that is what I needed
Kind Regards
Nicky


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## dmv (24 Aug 2008)

*Re: Minimum Director's wage*



ClubMan said:


> €8.65 an hour as an employee anyway.



There is no obligation for a proprietary director to pay himself even the minimum wage, even if the director is a so-called _employee_


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## Nicky (24 Aug 2008)

*Re: what is the minimum wage a director (ltd co) can pay himself hes an employee as w*

yes, but how can I do PRSI contribution without paying salary ?


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## Cormi (25 Aug 2008)

If you do not wish to take any salary from your company, as previous poster said there is no rule that you have to pay minimum wage os any salary to yourself as a working director, you may qualify to make voluntary contributions, you can find more information on www.welfare.ie its leaflet sw8, the minimum for class s is €253 i think, you also would be able to get more information from your local social welfare office. Although if you have other income e.g rental income you will be paying prsi on this anyway on your personal income tax return.


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## Nicky (25 Aug 2008)

Thanks Cormi again. you always give very useful information !
Regards
Nicky


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## bond-007 (25 Aug 2008)

Cormi said:


> If you do not wish to take any salary from your company, as previous poster said there is no rule that you have to pay minimum wage os any salary to yourself as a working director, you may qualify to make voluntary contributions, you can find more information on www.welfare.ie its leaflet sw8, the minimum for class s is €253 i think, you also would be able to get more information from your local social welfare office. Although if you have other income e.g rental income you will be paying prsi on this anyway on your personal income tax return.


Also the director could be already paying at A class for another employment.

There is nothing wrong with taking a salary of zero from the company which would leave you PRSI exempt in respect to the company.


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## Nicky (25 Aug 2008)

I read the leaflet sw8, yes there is € 253 for the class S, however it is not saying that is payment weekly, monthly or ones a year.
Thanks
nicky


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## bond-007 (25 Aug 2008)

That would be an annual payment.


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## ClubMan (25 Aug 2008)

bond-007 said:


> which would leave you PRSI exempt in respect to the company.


Obviously no _PRSI _payments means no _PRSI _cover for the relevant period in case that's significant to you or anybody else.


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## bond-007 (25 Aug 2008)

Ah, but if you are paying PRSI in relation to another employment this would not matter.


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## DB74 (25 Aug 2008)

If you pay yourself under Gross €26K per annum (€500 per week) then you will only pay PRSI at 3% and not 5%.

Assuming that you have no other income, if you pay yourself €175 per week then you will not pay any PAYE because your single tax credit will cover any PAYE charged on the salary.


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## dmv (28 Aug 2008)

company directors pay 5%, no more no less and what's more they get nothing for it, forget about trying to cover you're pensio


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## Mahons (28 Aug 2008)

*Re: Minimum Director's wage*



Nicky said:


> For example, I would like to do PRSI contribution for my state pension


 
Nicky,

As a director; I'm paying the S class rate for PRSI and I'm not covered for a state pension or the majority of other PRSI benefits. I.e. medical etc... 

I've organised an exectutive pension plan through Hibernian which my company pays in to tax free.

Regards,

Mahons


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## Nicky (28 Aug 2008)

Thank you Mahons,
could you clarify how much the Gross, PRSI and PAYE weekly, monthly there are, please ?
Regads


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## Donaldo (29 Aug 2008)

*Re: Minimum Director's wage*



Mahons said:


> Nicky,
> 
> As a director; I'm paying the S class rate for PRSI and I'm not covered for a state pension or the majority of other PRSI benefits. I.e. medical etc...
> 
> ...



This is incorect Dept Social Welfare states:

CLASS S BENEFITS

Widow's or Widower's (Contributory) Pension
Guardian's Payment (Contributory)
State Pension (Contributory)
Maternity Benefit
Adoptive Benefit
Bereavement Grant


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## Mahons (29 Aug 2008)

Nicky,

Unfortuantely I use Payback software to calculcate my payroll, it's all automatic so I don't know the actually figures.  It's very good and cheap. €125+VAT if I remember correctly.

I've no affiliation. 

Regards,

Mahons


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## Mahons (29 Aug 2008)

*Re: Minimum Director's wage*



Donaldo said:


> This is incorect Dept Social Welfare states:
> 
> CLASS S BENEFITS
> 
> ...


 

Not entirely untrue; I should have stated that you're not entitled to a full state pension.

Class A receives the following benefits; notice there are two types of state pensions.

*CLASS A BENEFITS*

Jobseeker's Benefit
Illness Benefit
Health and Safety Benefit
Maternity Benefit
Adoptive Benefit
Invalidity Pension
Widow's or Widower's (Contributory) Pension
Guardian's Payment (Contributory)
State Pension (Transition)
State Pension (Contributory)
Bereavement Grant
Treatment Benefit
Occupational Injuries Benefits
Carer's Benefit
 
as opposed to:

*CLASS S BENEFITS*

Widow's or Widower's (Contributory) Pension
Guardian's Payment (Contributory)
State Pension (Contributory)
Maternity Benefit
Adoptive Benefit
Bereavement Grant
 
http://www.welfare.ie/topics/prsi/prsiclasses.html

"Self-employed people are covered for certain pensions, Maternity and Adoptive Benefit, Guardian's Payment (Contributory) and the Bereavement Grant and pay *Class S*."


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## Mahons (29 Aug 2008)

I take it back, I just rang the Department and they confirmed that Class S does cover me for a state pension. I think I'll be having a word with my accountant who told me the opposite and pushed for the Pension plan. I smell a comission fee for him!!!


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## Nicky (30 Oct 2008)

If you were to pay yourself €8.65gross ph for 40 hours per week this would give you 346 gross per week, as you are a director you pay prsi at the s rate which is 5% i.e 17.30, and also as a director you are not given the paye credit so you are only entitled to personal credit of €1830(2008), therefore weekly this would give you tax payable of 34.01(346*20%=69.20-35.19weekly tax credit) this would give you a net take home wage of €294.69 per week. yearly figures Gross salary: 17992, Prsi 899.60 and tax of 1768.52 giving a net yearly wage of 15323.88.

Thanks Cormi,
I forgot to ask you, is there any employer prsi contribution and what is %?


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## Graham_07 (30 Oct 2008)

Nicky said:


> If you were to pay yourself €8.65gross ph for 40 hours per week this would give you 346 gross per week, *as you are a director you pay prsi at the s rate which is 5% i.e 17.30,* and also as a director you are not given the paye credit so you are only entitled to personal credit of €1830(2008), therefore weekly this would give you tax payable of 34.01(346*20%=69.20-35.19weekly tax credit) this would give you a net take home wage of €294.69 per week. yearly figures Gross salary: 17992, Prsi 899.60 and tax of 1768.52 giving a net yearly wage of 15323.88.
> 
> Thanks Cormi,
> I forgot to ask you, is there any employer prsi contribution and what is %?


 
As a proprietory director on €346 pw this is not correct. The Class is S0. The Health Levy of 2% does not kick in until €500pw and PRSI is only 3% not 5%. 

There is no employer portion on class S.


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## papervalue (30 Oct 2008)

I would suggest that you visit an accountant with all your question's and any savings now you are making by not getting professional advice could be costly long term if you dont knew what you are doing. As i think that your company is small it would be no harm to make one visit to make sure that everything is in order and your tax obligations and company office obligations are made clear to you.


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## Graham_07 (30 Oct 2008)

papervalue said:


> I would suggest that you visit an accountant with all your question's and any savings now you are making by not getting professional advice could be costly long term if you dont knew what you are doing.


 
Agreed.


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