what is the minimum salary a director (ltd co) can pay himself for prsi purposes?

Re: Minimum Director's wage

Mahons said:
Nicky,

As a director; I'm paying the S class rate for PRSI and I'm not covered for a state pension or the majority of other PRSI benefits. I.e. medical etc...

I've organised an exectutive pension plan through Hibernian which my company pays in to tax free.

Regards,

Mahons
Click to expand...

This is incorect Dept Social Welfare states:

CLASS S BENEFITS

Widow's or Widower's (Contributory) Pension
Guardian's Payment (Contributory)
State Pension (Contributory)
Maternity Benefit
Adoptive Benefit
Bereavement Grant
 
Nicky,

Unfortuantely I use Payback software to calculcate my payroll, it's all automatic so I don't know the actually figures. It's very good and cheap. €125+VAT if I remember correctly.

I've no affiliation.

Regards,

Mahons
 
Re: Minimum Director's wage

Donaldo said:
This is incorect Dept Social Welfare states:

CLASS S BENEFITS

Widow's or Widower's (Contributory) Pension
Guardian's Payment (Contributory)
State Pension (Contributory)
Maternity Benefit
Adoptive Benefit
Bereavement Grant
Click to expand...


Not entirely untrue; I should have stated that you're not entitled to a full state pension.

Class A receives the following benefits; notice there are two types of state pensions.

CLASS A BENEFITS
  • Jobseeker's Benefit
  • Illness Benefit
  • Health and Safety Benefit
  • Maternity Benefit
  • Adoptive Benefit
  • Invalidity Pension
  • Widow's or Widower's (Contributory) Pension
  • Guardian's Payment (Contributory)
  • State Pension (Transition)
  • State Pension (Contributory)
  • Bereavement Grant
  • Treatment Benefit
  • Occupational Injuries Benefits
  • Carer's Benefit

as opposed to:

CLASS S BENEFITS
  • Widow's or Widower's (Contributory) Pension
  • Guardian's Payment (Contributory)
  • State Pension (Contributory)
  • Maternity Benefit
  • Adoptive Benefit
  • Bereavement Grant

http://www.welfare.ie/topics/prsi/prsiclasses.html

"Self-employed people are covered for certain pensions, Maternity and Adoptive Benefit, Guardian's Payment (Contributory) and the Bereavement Grant and pay Class S."
 
I take it back, I just rang the Department and they confirmed that Class S does cover me for a state pension. I think I'll be having a word with my accountant who told me the opposite and pushed for the Pension plan. I smell a comission fee for him!!!
 
If you were to pay yourself €8.65gross ph for 40 hours per week this would give you 346 gross per week, as you are a director you pay prsi at the s rate which is 5% i.e 17.30, and also as a director you are not given the paye credit so you are only entitled to personal credit of €1830(2008), therefore weekly this would give you tax payable of 34.01(346*20%=69.20-35.19weekly tax credit) this would give you a net take home wage of €294.69 per week. yearly figures Gross salary: 17992, Prsi 899.60 and tax of 1768.52 giving a net yearly wage of 15323.88.

Thanks Cormi,
I forgot to ask you, is there any employer prsi contribution and what is %?
 
Nicky said:
If you were to pay yourself €8.65gross ph for 40 hours per week this would give you 346 gross per week, as you are a director you pay prsi at the s rate which is 5% i.e 17.30, and also as a director you are not given the paye credit so you are only entitled to personal credit of €1830(2008), therefore weekly this would give you tax payable of 34.01(346*20%=69.20-35.19weekly tax credit) this would give you a net take home wage of €294.69 per week. yearly figures Gross salary: 17992, Prsi 899.60 and tax of 1768.52 giving a net yearly wage of 15323.88.

Thanks Cormi,
I forgot to ask you, is there any employer prsi contribution and what is %?
Click to expand...

As a proprietory director on €346 pw this is not correct. The Class is S0. The Health Levy of 2% does not kick in until €500pw and PRSI is only 3% not 5%.

There is no employer portion on class S.
 
I would suggest that you visit an accountant with all your question's and any savings now you are making by not getting professional advice could be costly long term if you dont knew what you are doing. As i think that your company is small it would be no harm to make one visit to make sure that everything is in order and your tax obligations and company office obligations are made clear to you.
 
You must log in or register to reply here.
Back
Top