How to account for summer work

S

States

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I and my wife are directors of a company where we are both also employees. My wife is a full time student but has three months off this summer.

She is being paid for work through the company as an employee. Obviously this has an impact on the Standard Rate Band for us as a couple for the 3 months she's working. (goes from €44,400 to €70,800)

How to I account for this when I'm calculating how much tax she & I should be paying for this 3 months period?

Also should she indeed get her tax paid back at the end of the summer?
 
States said:
How to I account for this when I'm calculating how much tax she & I should be paying for this 3 months period?
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Have you applied for a tax deduction card for her? If not use Form 12a for that purpose. This will tell you how you should operate PAYE & PRSI for her.
States said:
Also should she indeed get her tax paid back at the end of the summer?
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Probably not until you file your 2008 Directors Form 11.
 
Just to clarify, she has a P45 from her pervious employer (she left the job in July 2007 to start her studies), so don't think I need to have Form 12?
 
States said:
How to I account for this when I'm calculating how much tax she & I should be paying for this 3 months period?
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Easily enough. Your situation doesn't change. Your wife should pay tax at the 20% rate until she's earned 26,400. If she goes over that, she's in the higher bracket. As a director she should also pay Class S PRSI.
 
She will not get the paye credit, as it is not available to proprietry directors or their spouses, for wages taken from the company, of which they are directors.
 
Joe1234 said:
She will not get the paye credit, as it is not available to proprietry directors or their spouses, for wages taken from the company, of which they are directors.
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Correct, which means you may need to be careful in applying the P45 tax credits directly as that probably includes a PAYE credit entitlement from her previous job. Otherwise at year end on filing directors F11 return you may find an underpayment arising. If in doubt contact Revenue or your accountant (if you have one)
 
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