How are proprietary directors taxed?

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ButtermilkJa

Registered User
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Just so I know in my own head, can someone clarify for me as to how exactly proprietary directors are taxed. Is my example below (relating to 2007) correct...

Salary: €34,000
Monthly Earnings: €2,833.33
Tax: @20% = €566.66
minus Single Persons Credit (€1760/12) €146.67
= Total Tax Due: €419.99
PRSI: (€127*52)/12 = €550.33
€2,833.33 - €550.33 = €2,283 @4% = €91.32
Health Levy: €2,833.33 @2% = €56.66

Net Earnings = €2,833.33 - €419.99 - €91.32 - €56.66 = €2,265.36

Does this seam ok? I'm assuming proprietary directors are allowed the usual €127 per week PRSI credits and that the rate is 4% thereafter. Is this correct?

Thanks!
 
ButtermilkJa said:
Just so I know in my own head, can someone clarify for me as to how exactly proprietary directors are taxed. Is my example below (relating to 2007) correct...

Salary: €34,000
Monthly Earnings: €2,833.33
Tax: @20% = €566.66
minus Single Persons Credit (€1760/12) €146.67
= Total Tax Due: €419.99
PRSI: (€127*52)/12 = €550.33
€2,833.33 - €550.33 = €2,283 @4% = €91.32
Health Levy: €2,833.33 @2% = €56.66

Net Earnings = €2,833.33 - €419.99 - €91.32 - €56.66 = €2,265.36

Does this seam ok? I'm assuming proprietary directors are allowed the usual €127 per week PRSI credits and that the rate is 4% thereafter. Is this correct?

Thanks!
Click to expand...

NO, proprietory directors do not get the weekly €127 exempt amount and also the PRSI is 3% so PRSI for the month is €85.00. Your PRSI class on above is S1 see here

Otherwise your calc is correct assuming you have a Standard Rate Cut Off Point of €34,000
 
Just clicked on your link there Graham to details on PRSI S class (I'm also on this PRSI) and noticed:
4. Do I pay PRSI on all income?

You pay PRSI only on your reckonable income, which includes:

benefits-in-kind,

income from a trade or profession,

interest, annuities and income from foreign investments, such as property,

rent from any property in Ireland,

income from which tax has already been deducted such as, annuities, bank or building society interest, maintenance payments,

income from share dividends and other payments received from companies based in Ireland, and

certain taxable income from employment (for example, company directors, motorcycle couriers), minus any allowable superannuation contributions.



So if I earn interest on savings, do I have to pay PRSI on it??? And how does that work?
 
moondance said:
income from which tax has already been deducted such as, annuities, bank or building society interest, maintenance payments,


So if I earn interest on savings, do I have to pay PRSI on it??? And how does that work?
Click to expand...

Proprietory directors must, by law, file a tax return annually with Revenue. This produces a Notice of Assessment and the PRSI and tax on any items not otherwise dealt with on PAYE or DIRT etc, is charged there.
 
I don't think I'm a proprietory director (I presume this is a managing director with biggest share of company?), I own 20% of company - maybe you could clear this up for me!
 
moondance said:
I don't think I'm a proprietory director (I presume this is a managing director with biggest share of company?), I own 20% of company - maybe you could clear this up for me!
Click to expand...

As regards Income Tax
from [broken link removed]
The term "proprietary director" means a director of a company who is the beneficial owner of or is able either directly or indirectly to control more than 15% of the ordinary share capital of the company.
 
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