SelfEmployed IT Contractor working through Limited company: tax query

S

s2000

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Hi there,

I am self employed, working through a limited company... standard I.T. contractor way of working.

If I take say 2,000 out of my company account into my personal account and want to pay PAYE and PRSI on it... what PAYE/PRSI would I owe on that? I have been taking a wage that puts me in the high tax bracket so this would all have to taxed at the higher rate. Is it

  • 41% PAYE and 5% PRSI of the amount I TAKE INTO MY ACCOUNT (i.e. 820 euros PAYE and 100 PRSI) meaning the 2000 into my account will have "cost" the company 2920
  • Or is it that if I take 2000 out then I owe ~2000 to the revenue as overall the withdrawl would need to be ~50/50 tax versus income? I.e. 2000 to me and around 2000 to the revenue? Meaning that the 2000 to my account would actually "cost" the company ~4000?
Thanks a mil... this question has always confused me!

Adrian
 
Your company would record a gross payment to you of 3,703.70. The company should return 1518.52 PAYE and 185.18 PRSI to the revenue, leaving you with net pay of 2,000.
 
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