PRSI - amounts changing

I

IWONDER

Registered User
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Hi,
I'm trying to work out why the amount of PRSI I am paying has been changing for the past four months. I get a salary and shift allowance every month which never changes, and I have also had some overtime during one of the months.
How is PRSI calculated exactly? - in simple terms please, my maths is very weak (i had a look at the revenue site and just saw blah blah - I really am that bad).
The amount has been varying from e106 to e95 to e126. This month I earned 540 before tax in overtime, yet the prsi was e106, and last month it was e95.
I think this happened to me last year also - where the amount of take home pay I received increased in the last 3 or 4 months of the year.
I am afraid that a mistake is being made somewhere and that I am going to end up owing money.

Can you help?
 
Provided you earn over €400 a week -- you pay a Health Levy of 2% on the total amount earned, otherwise you pay no health levy (I think.). After that, Class A1 PRSI is also applied at 4%. The first €551 you earn a month (€127 a week) is exempt from PRSI and not included.

So, take 2% of your total income for the period (before tax). This is your Health Levy (assuming your income is over €400 a week.).
Subtract €551 from your total income for the period. Take 4% of the remainder -- this is your PRSI.
Add Health Levy to PRSI to get your total "PRSI".

In your case -- perhaps your PRSI is being calculated on a weekly basis even though you are paid monthly? So rather than €551 being subtracted from your income, €127 is multiplied by the number of weeks in the pay period. That seems slightly unorthodox, but would explain how your PRSI could vary from month to month, even though your pay before tax doesn't.

PRSI is the most complicated part of the "tax" system. This is how my payslip works, and I guess most other PAYE workers. It's also possible (but unlikely) that you fall into a different PRSI class so the rate or exemption limits may be different.

A related complication is you only pay the 4% PRSI on the first €46,600 (before tax) you earn in 2006. For some people this means their PRSI decreases in later months!
 
It's complicated alright. I should understand it after all these years but I must have a mental block.

Ok I worked out the 2% of this months earning and it's pretty much accurate.
I'll have to work out the 4% part - and hopefully it is just a case that the prsi amount is decreasing.

Is this something that I could be liable for - if the correct amount was not being paid? Do you think I should follow up with my employer?

Thanks very much.
 
In 2006, if you earn more than 440 a week, you pay 2% Levy on all income.

If you earn less than 300pw you pay 0% PRSI.

If you earn more than 300 pw, the first 127 pw is free of PRSI. the balance, up to an annual ceiling of 46,600 is subject to 4% PRSI.
 
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Thanks Protocol -- that's much clearer than what I wrote, plus I'd forgotten about the €300 pw. There seem to be a few errors in Brendan's Key Post, so we may steal yours
 
There is a very useful PRSI calculator on the welfare website. http://www.welfare.ie/calculators/prsi_calc_06.html

There's also a PRSI Ready Reckoner for people who are weekly paid.
http://www.welfare.ie/publications/prsi1.pdf

By the way if your employer is not deducting enough PRSI, you don't have to pay it back. The onus is on the employer to deduct the proper amount.


33. Paying the correct PRSI class
Make sure you apply the correct contribution class to each employee at the time you pay him or her. If, for any reason, you cannot establish the correct class, apply the class that you reasonably believe is correct.
If under these circumstances the employee ends up paying more PRSI than he or she owes, their employer must repay him or her the difference. If the employee ends up paying less than he or she owes, the employer is liable to pay the difference. So, it is important that the employer establish and apply the correct class from the outset.

This is taken from here http://www.welfare.ie/publications/sw3.html#33

Here's a step by step method of calculating PRSI:

1. Take the monthly income (less superannuation, if applicable) and determine which subclass of PRSI should apply (see page 10 of SW14). http://www.welfare.ie/publications/sw14.pdf

2. Assuming the subclass is A1 - 2% of €551 = €11.02. This is the Health Contribution.

3. Deduct €551 from the gross monthly pay (less superannuation, if applicable).

4. Calculate 6% of this figure.

5. Add this to €11.02 and it should give you the employee PRSI that's due for that month

Hope this helps and doesn't confuse
 
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