Part-time second job and tax implications - is self-assessment the way to go?

[Harlequin]

I'm currently working as an employee of a charity. I will shortly be starting a new full-time job in a different company and will be paying tax at the lower rate.

The charity has asked me to continue to do some paid work for them after I leave and I need to work out how to manage the tax & PRSI end of things. I've never had a second job before and have only ever worked as an employee so I'm hazy about what's involved.

The extra work will be pretty flexible and will probably amount to around 10 hours a month or less. I will work as and when I'm needed and the number of hours will vary depending on what's happening in a particular week. The money will probably be around €15 per hour and I don't think it will get near pushing me into a higher tax bracket. Without getting too specific, the work will be general admin, proofreading, editing and drafting as well as giving advice on certain things. I'll probably be working from home most of the time.

• Should I register for self-assessment?
• Do I then invoice the charity on a monthly basis for the hours I've put in?
• How do I calculate what my tax bill will be when I've no real idea what I'll be earning? Do I set aside 20% of my earnings to meet a tax bill at the end of the year or is it not quite that simple?
• What happens with PRSI? It'll be paid in my full-time employment but what about the second job?
• Are there any deductions I should make?

I have read some of the stuff on the Revenue website but I'd like to be clearer about whether self-assessment is the way to go or not. Should I be talking to Revenue about this first?

I'm taking on this extra work mainly because I am trying to pay a loan off early and the last thing I need is to be working more hours and losing most of it on tax! So I'm trying to find the most tax-efficient way of handling this.

Any help gratefully received - I'll provide additional info or clarifications if needed! Thanks.

 

[webtax]

You can arrange with your tax office to deduct this tax by making an adjustment to your scrop/tax credits. Make sure that you provide them with an accurate figure for your income and that you get a balancing statement at the end of the year to check your tax situation. Since the extra amount you are earning is quite low it will not be liable to prsi (<€3,174) but you will have to pay the health levy on it.

 

[Harlequin]

Thanks for replying. How can I provide my tax office with an accurate figure for my income when I don't know how much it will be or how long it will go on for? Do I estimate it to the best of my ability and then if it turns of to be different, I re-do it at the end of the year?

 

[ubiquitous]

Thanks for replying. How can I provide my tax office with an accurate figure for my income when I don't know how much it will be or how long it will go on for? Do I estimate it to the best of my ability and then if it turns of to be different, I re-do it at the end of the year?

Sorry, I don't understand what you are trying to get at here. If you're working for this charity, part-time or full-time, they must operate PAYE/PRSI on your earnings, unless you're genuinely providing services as a self-employed contractor, which you're clearly not.

 

[mathepac]

The easiest way may be to allow the charity to process your pay through their existing payroll system where they will deduct tax on an emergency week 1 basis and give you a p60 at tax-year end. Include these figures in your year-end tax return and those nice people in the Revenue will send you a cheque for any excess paid.

I can't see any sense in you registering for self-assessment, IMHO.