Form 11 DIRT/PRSI

[cologneboy]

I've looked through previous threads but could not find a definite answer to the question.
It appears on the online form that 2%, presumable PRSI, are additionally charged on the gross interest earned. Is this correct?
Could somebody please expand on the issue?

Much appreciated,

cologneboy

 

[Graham_07]

The 2% is the Health Levy / Contribution, chargeable on incomes exceeding certain limites. It is part of the PRSI charge heading but is not PRSI but basically an additional tax. for 2007 returns I believe the threshold for the levy is income exceeding €24,960 for the year.

 

[WaterSprite]

For self employed, your "income" for the year includes gross interest and so PRSI/Health Levy is imposed on the interest.

Sprite

 

[Graham_07]

For self employed, your "income" for the year includes gross interest and so PRSI/Health Levy is imposed on the interest.

Sprite

All taxpayers ( not just self-employed) whose income comes with in the remit of the Health levy on additional income such as deposit interest would be chargeable but in the case of PAYE workers this is not normally collected as Revenue Balancing Statements (P21's) are not geared to it's collection.

 

[WaterSprite]

So for PAYE workers, they should also be paying the 5% (or 5.5% if a high earner) on deposit interest? If so, why isn't it collected do you know?

Thanks
Sprite

 

[Graham_07]

So for PAYE workers, they should also be paying the 5% (or 5.5% if a high earner) on deposit interest? If so, why isn't it collected do you know?

Thanks
Sprite

No, not the 5%, as the 5% is made up of 3% PRSI ( which PAYE workers are already paying as part of their PRSI contribution ) , but just the 2% Health Levy is due on all income over the relevant threshold. As to why it is not collected I have no answer to that but historically PAYE Balancing Statements (P.21's) do not seem to have the facility buit in, perhaps because as a PAYE statement, i.e. a tax statement they are not geared to PRSI which is the responsibility of another department. Perhaps someone has a proper answer but that would be my take on it.

There is an anomaly as the self-assessed Notice of Assessment collects tax, PRSI and Levies through Revenue.

 

[WaterSprite]

No, not the 5%, as the 5% is made up of 3% PRSI ( which PAYE workers are already paying as part of their PRSI contribution ) , but just the 2% Health Levy is due on all income over the relevant threshold. As to why it is not collected I have no answer to that but historically PAYE Balancing Statements (P.21's) do not seem to have the facility buit in, perhaps because as a PAYE statement, i.e. a tax statement they are not geared to PRSI which is the responsibility of another department. Perhaps someone has a proper answer but that would be my take on it.

There is an anomaly as the self-assessed Notice of Assessment collects tax, PRSI and Levies through Revenue.

Thanks for that. Just on the PRSI point though - PAYE workers have their PRSI deducted at source for PAYE income only, right? So, in respect of DIRT, PRSI wouldn't have been deducted at all from interest payments as it isn't part of payroll. It appears to me that PAYE workers don't pay PRSI or Health Levy on Deposit Interest but the Self Employed do. Am I wrong here?

thanks
Sprite

 

[Graham_07]

PAYE workers have their PRSI deducted at source for PAYE income only, right? So, in respect of DIRT, PRSI wouldn't have been deducted at all from interest payments as it isn't part of payroll. It appears to me that PAYE workers don't pay PRSI or Health Levy on Deposit Interest but the Self Employed do. Am I wrong here?

thanks
Sprite

Remember for PAYE workers there is a ceiling on PRSI so if earnings from PAYE are already over that then no PRSI would be due anyway. PAYE workers ( normal A class I mean) also pay a higher PRSI rate than self-employed but then self-employed have no ceiling on PRSI. It is somewhat convoluted.

(one might see the PRSI ceiling the subject of some attention next Tuesday )

 

[agoose]

Remember for PAYE workers there is a ceiling on PRSI so if earnings from PAYE are already over that then no PRSI would be due anyway. PAYE workers ( normal A class I mean) also pay a higher PRSI rate than self-employed but then self-employed have no ceiling on PRSI. It is somewhat convoluted.

But isn't Sprite correct?

Just on the PRSI point though - PAYE workers have their PRSI deducted at source for PAYE income only, right? So, in respect of DIRT, PRSI wouldn't have been deducted at all from interest payments as it isn't part of payroll. It appears to me that PAYE workers don't pay PRSI or Health Levy on Deposit Interest but the Self Employed do. Am I wrong here?

A person is a PAYE earner, less than 66 years old and has income from deposit interest/investment income

Are the following statements correct?

PRSI/Health levy in relation to the PAYE employment is collected through the employment.

PRSI/HL arising from the deposit interest is not collected through the employment. Thus the person must fill out the self assessment form.

Should the deposit interest be more than €3174 (under that no PRSI due) per year then PRSI is charged at the class S rate (as that class is the correct one to cover investment income) - 3% with no ceiling.

If the interest is less than €26000 per year (yearly HL threshold) no HL is due.

Now something I am not clear on:

Assuming that the deposit interest is more than €3174 does the minimum PRSI of €253 apply?

Are PRSI and health levy due on a Social welfare payment if the person is UNDER 66?

Are PRSI and health levy due on a UK Social security pension if the person is UNDER 66?

If a person is OVER 66 and receives a SW contrib pension then no PRSI is due (no PRSI payabe if over 66). Is the contrib pension disregarded in calculating the health levy (payable until 70)?


Source: www.welfare.ie leaflet sw74 PRSI for self employed

 

[pablopicasso]

Have to say I find this very strange

I've already paid DIRT on the savings, and just because I happen to be filing for income from rental property I get taxed again on the interest received on savings? Yet if I didn't have to file a form 11 I would have only ever paid the DIRT?

I've just completed a form 11 on ROS, and the interest is clearly being included in my taxable income. A health levy total is ALSO added!

So e.g. i had 149 gross interest, my wife had 147, but I'm getting a health levy charge of 1050 x 2% and my wife 147 x 2% - where does the 1050 come from? And the (149 + 147) is included in taxable income.

Only other thing appearing out of nowhere on the calculation is a 'retention tax credit' - I didn't fill in anything relating to that as far as I'm aware - is this anything to do with it?

 

[Graham_07]

Have to say I find this very strange

I've already paid DIRT on the savings, and just because I happen to be filing for income from rental property I get taxed again on the interest received on savings? Yet if I didn't have to file a form 11 I would have only ever paid the DIRT?

I've just completed a form 11 on ROS, and the interest is clearly being included in my taxable income. A health levy total is ALSO added!

So e.g. i had 149 gross interest, my wife had 147, but I'm getting a health levy charge of 1050 x 2% and my wife 147 x 2% - where does the 1050 come from? And the (149 + 147) is included in taxable income.

Only other thing appearing out of nowhere on the calculation is a 'retention tax credit' - I didn't fill in anything relating to that as far as I'm aware - is this anything to do with it?

The Retention Tax Credit is a credit for the DIRT already paid ( DIRT = Deposit Interest Retention Tax) so you don't end up paying TAX on the interest at all on the Form 11. You have paid the DIRT and that is the end of it. You are however liable to the Health Levy of 2% which is not a Tax (per se) but is part of the greater PRSI heading as it is a Social Welfare item. However it is basically a tax as you get nothing for it.

You are also liable for the H/Levy on the rental profits so that becomes part of the total charge of H/Levy on Rents+Gross Dep Int.

 

[pablopicasso]

The Retention Tax Credit is a credit for the DIRT already paid ( DIRT = Deposit Interest Retention Tax) so you don't end up paying TAX on the interest at all on the Form 11. You have paid the DIRT and that is the end of it. You are however liable to the Health Levy of 2% which is not a Tax (per se) but is part of the greater PRSI heading as it is a Social Welfare item. However it is basically a tax as you get nothing for it.

You are also liable for the H/Levy on the rental profits so that becomes part of the total charge of H/Levy on Rents+Gross Dep Int.

makes sense now - thanks for your help