Stuck bad on self-employed prsi!

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domainer222

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Hi,

I am a director of a small company from which i earn most of my income. I also have a parttime job from which i persume i pay normal prsi.

I have been deducting 5% class prsi from my income as a director.

I am wondering what the correct application of the class s prsi is.

Is it just like an income tax deduction? Or how does it work?

Is it like this:

Salary = €25,000

Less: PAYE = €5000 (say)
Less: 5% PRSI = €1250

Net Pay: = €18750

or is it like this..:

Salary = €25,000

Less: PAYE = €5,000 (say)

Net Pay: = €20,000

i.e. the company pays the prsi. I appreciate the above example is not making sense as the prsi is the same.

I am starting with net payments and working backwards so it is impacting things.

I did a bit of googling and the thing seems to be really complicated.

I read somewhere the health levy does not have to be paid until you make an income tax return.

Then I read all sorts of heavy stuff about people who have a job and also are self employed. Maybe the income limits come into play?

I am really discouraged because a few years ago i rang the revenue and the told him my situation. he said i did not qualify for the PAYE credit. I decided to ring again and this time the person said i definitely did qualify.

*sigh* help anyone?
 
Your first example is correct, assuming you are earning between 500.01 and 1,925 per week. Below 500.01 you pay 3% on everything or if above 1,295, 5.5% on the excess, but can claim back the extra .5% is you don’t exceed 100,100 per year. Simple, stuff. But dont worry many accountants have problems getting PRSI correct. :)
The problem with asking Revenue questions is that you will get different answers. As an experiment, just do up an email using hotmail etc don’t stick your full name or PPS number and send it to the email addressed for the different regions. Don't expect instant responses and the quality of the replies varies from text speak, pointers to documents you have already read but don’t answer the question, to quite good.
 
You really should get professional advice on this sort of query, unless you know what you are doing. Its not worth the risk of falling foul of the Revenue or ODCE if you make a mess of it. Depending on Revenue is dodgy particularly if you assume that the person who is most helpful is also the most authoritative.
 
This form theSW website:

"
In general, payment of self-employed PRSI is made through The Office of the Revenue Commissioners (Revenue). Those who pay their tax direct to the Collector-General will pay their Social Insurance and Health Contribution with their income tax. They will be liable for a Social Insurance Contribution of 3% of ALL income or €253, whichever is the greater, in addition to the Health Contribution, where applicable. However, where a self-employed person is deemed by Revenue to have no net tax liability (NNL), PRSI is not collected. Cases classified as NNL by Revenue are referred to the Department of Social and Family Affairs to determine if a PRSI liability exists. In order to be liable to pay NNL-rate PRSI, which is taken into account when determining pension entitlement, it is necessary to have annual income of €3,174 - other conditions also apply. Where a PRSI liability exists, special arrangements are put in place under which PRSI is paid directly to:
NNL Section
Department of Social and Family Affairs
Cork Road
Waterford
Telephone: Waterford (051) 356 000 / Dublin (01) 704 3000"
 
first of all get pro' advise,if you are self employed you'll need an accountant anyway.

theres 2 classes for self employed
1)SO up to 440 euro,pay 3% on all income
2)S1 more than 440 euro per week,pay 5 % on all.
just to inform you the only benefit you get from this is old age contributary pension,no social welfare benefits what so ever,so consider your income protection etc etc.
as you already stated your an employee elsewhere,so thats a complication,professional advise again please.good luck
 
domainer222 said:
Hi,

I am a director of a small company from which i earn most of my income. I also have a parttime job from which i persume i pay normal prsi.

I have been deducting 5% class prsi from my income as a director.

I am wondering what the correct application of the class s prsi is.

Is it just like an income tax deduction? Or how does it work?

Is it like this:

Salary = €25,000

Less: PAYE = €5000 (say)
Less: 5% PRSI = €1250

Net Pay: = €18750

or is it like this..:

Salary = €25,000

Less: PAYE = €5,000 (say)

Net Pay: = €20,000

i.e. the company pays the prsi. I appreciate the above example is not making sense as the prsi is the same.

I am starting with net payments and working backwards so it is impacting things.

I did a bit of googling and the thing seems to be really complicated.

I read somewhere the health levy does not have to be paid until you make an income tax return.

Then I read all sorts of heavy stuff about people who have a job and also are self employed. Maybe the income limits come into play?

I am really discouraged because a few years ago i rang the revenue and the told him my situation. he said i did not qualify for the PAYE credit. I decided to ring again and this time the person said i definitely did qualify.

*sigh* help anyone?
Click to expand...
 
You say you have a part-time job on which you presume you pay PRSI. Check that out!! This could be very important to you as your only Class S Benefits are your Pension.

Your Class A Contributions in your Part-time job covers the full range of Benefits so make sure they are in order - do not presume
 
I'm assuming your payroll is done by paper return, i.e. tax deduction cards etc...?

Is this your own small company or are you just a director?

Your S class or sub-class S contributions are done just as A class or sub-class A, the only difference being the Health Levy and the Employers contribution. Your first example appears to be correct.

PRSI is a horrible idea! Not to mention the problems when you actually go to claim the old age pension!! I hate PRSI!!
 
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