PRSI For Director

[apple]

Hi Guys

In 2008 I was a director of a company and was also a paye employee should I be on PRSI class S.


Hi Guys thanks for the replys. I worked for a month as a paye worker and was a company director ( 50% shareholder) at the same time, then I left the paye employment to concentrate full time on my business. So I guess I should be class S.

Also as I worked 1 month Im entitled to the paye credit for that year but lose it next year is that correct? and would this have a bearing on my PRSI class.

thanks again

 

[Black Sheep]

Re: PSRI For Director

Are you an employee in the same company that you are a director or is your PaYE a seperate employment for another employer

 

[John Rambo]

Re: PSRI For Director

Key question for the OP is whether he or she is a proprietary director, i.e. do the own 15% or more of the company.

If he or she is a proprietary director, then they're in a Class S scenario.

If he or she is not a proprietary director, then they're in a Class A scenario.

They key differences are the PRSI rates, thresholds, and the fact that the company does not pay employer's PRSI (10.75%) in respect of Class S individuals.

 

[podowd]

If you were a director and 50% shareholder you would be considered a Proprietary Director and your income from that employment (as a director) would be subject to PRSI Class S.

If I understand your email correctly you have left PAYE and are now solely working for the company that you are director/shareholder of? If so you will pay Class S PRSI and you will not get the PAYE tax credit for the current year.

If you had other PAYE employment in 2008 you will get a PAYE tax credit but not the full amount, it will be restricted to the amount of PAYE that you paid in that employment only.

Note that Revenue will not take away the PAYE tax credit unless you tell them that your circumstances have changed, and don't be tempted to keep the credit as they will catch up with you eventually and look for payment of the tax that you owe them!!

 

[Towger]

I came across an accountant last week, who thinks that a (proprietary) directors PAYE salary from their company should be on class A1 and only their drawing on class S. I wonder if he was in the came accountancy classes as Bertie. I have given up caring at this stage, they can well afford the fines if/when they get audited.

 

[Eblanoid]

If you had other PAYE employment in 2008 you will get a PAYE tax credit but not the full amount, it will be restricted to the amount of PAYE that you paid in that employment only.

I'm curious, how exactly does this work: how is this restriction calculated, for example if I have a salary of €20,000 gross in employment A (not a proprietary director) and a salary of €20,000 in employment B (proprietary director).

I ask this because In previous years I've been both an employee (not a proprietary director) and getting income as a Sole Trader. When I fill in my Form 11 I declare all income and claim PAYE credit: no objection is raised.

 

[Joe1234]

I'm curious, how exactly does this work: how is this restriction calculated, for example if I have a salary of €20,000 gross in employment A (not a proprietary director) and a salary of €20,000 in employment B (proprietary director).

I ask this because In previous years I've been both an employee (not a proprietary director) and getting income as a Sole Trader. When I fill in my Form 11 I declare all income and claim PAYE credit: no objection is raised.

You are correct in this scenario. You are entitled to the paye credit if you have employment other than with the company that you are a director in. Your 20K salary from employment A qualifies you for the Paye credit. As the credit is worth approx 9k tax free, then you see the full benefit of the credit. If employment A only earned 5K then the credit would be restricted to 1,000.