Paye

mingle · #1 09-10-2006, 08:58 PM

Hi guys,

I hope you dont mind but im a little unknown to the whole tax thing, if someone would be so kind to explain a few things to me that would be so great.
Thanks so much.

1)
I had been unemployed and claiming unemployment benefit from Jan to the end of July. I started working the first week of August. Because I have been off work for so long does that mean my paye is going to very high for awhile.
Basically I earn 1625 but come out with 1435 due to paye, prsi & a social club of 7 euros. My tax credit a month is 219 approx. Am i overpaying tax at the moment or does that sound about right.

2)
I have been renting for 5 years - all private. Am i due rent relief or is it too late. 4 years in an apartment, almost 1 year in my current house.

3)
I have paid Refuge since last January but only in monthly installments - can i also claim this?

4)
Also registered with revenie.ie a few things i dont understand
This shows my tax credits & incomes - havent a clue what it means.

Date Commencement 08/08/2006 Total Main
Date Cessation
Flat Rate Expenses 23.00 23.00
PAYE Tax Credit 1490.00 1490.00
Personal Tax Credit 1630.00 1630.00
DSFA Unemployment Benefit (900.16) (900.16)
Net Credits 2242.84 2242.84
Net Rate Band (SRCOP) 27614.20 27614.20

asdfg · #2 09-10-2006, 10:56 PM

PAYE is calculated on a cumuilative basis. Your tax is calc on your wages from jan to date and substracted from the previous year to date to give the current wages.
Your salary for Aug ytd 1625
Tax at 20% 325
Tax credit 187*8 1495
No tax due

Your salary for Sept ytd 3250
Tax at 20% 650
Tax credit 187*9 1682
No tax due

Based on the figures you should not pay any tax this year. From Jan you will have to pay some tax but it will depend on the budget.

PRSI due on 1625 pm is approx 43 euro

So your monthly take home pay currently should be 1582
If its different or you don't understand let me know and I'll try to explain

Quote:

2)
I have been renting for 5 years - all private. Am i due rent relief or is it too late. 4 years in an apartment, almost 1 year in my current house.

You can claim rent relief in respect of the years 2002 2003 2004 2005 and the current year 2006

Quote:

Also registered with revenie.ie a few things i dont understand
This shows my tax credits & incomes - havent a clue what it means.

This is a breakdown of the make up of your credits - amount that is deducted from you gross tax to give your net tax

SRCOP is the amount that you can earn up to before paying tax at the higher rate.

Tenacious · #3 09-10-2006, 11:14 PM

To answer your queries 1 to 4 above:

1) You are overpaying your tax currently as you are not claiming all the tax credits available to you, i.e. rent credit. As you have only started work at start of August, your annual tax credits should be allocated over the remaining months until the end of the tax year, i.e. 5 months.

2) You can claim tax relief on private rented accommodation for the four prior tax years, i.e. 2002, 2003, 2004, 2005 as well as the current tax year. You cannot claim prior to the 2002 tax year. See this form :
http://www.revenue.ie/forms/rent1.pdf

3) Tax relief for refuse charges is claimed one year in arrears. Whatever charges you pay this year you can claim a tax credit at the standard rate in the following tax year.
http://www.revenue.ie/leaflets/it27.pdf

4) These details appear on your certificate of tax credits, and are based on your personal circumstances. Your tax is calculated from these figures.
These are the details per Revenue's records.
More info here :
http://www.revenue.ie/services/ind_work.htm

mingle · #4 10-10-2006, 03:37 PM

hey guys

thanks for you help. Im still a little confused though because my monthly tax credit on my wage slip says 219.
so

1625@ 20% = 325
325 - 219 = 106(tax to be paid)

plus prsi of approx 50 euros

but my salary net is 1437 approx.

Your saying i sholdnt be paying any tax? have i accumalted my increase of tax payable due to be unemployed and claiming for over 7 months.

What does the Unemployment Benefit (900) mean?

asdfg · #5 10-10-2006, 04:36 PM

The declaration of Credits and std rate cut off point that you received from revenue says how much the tax credit is per week / per month. If you wage slip is different you need to talk to the payroll person.
I do not believe you should be paying any tax until next year. Tax is calc on a cumulative basis. Is the person doing the wages aware of this. Is your employer a small operation or is the payroll calc by a software package. None of the figures you presented apprear to add up.

Quote:

What does the Unemployment Benefit (900) mean?

Did not realise you were taxed on this once you started working. I think it is 20% of your unemployment benefit less 6 weeks that you received.

ClubMan · #6 10-10-2006, 05:23 PM

UB payments are assessable for income tax.

PART 13: TAXATION OF UNEMPLOYMENT BENEFIT

For example if you are unemployed for a few months and working for the rest of the year then all income including UB payments is considered when balancing your tax at the end of the year (e.g. P21).

mingle · #7 10-10-2006, 06:05 PM

thanks everyone, there had been a bit of a mix up.
Just double checked my wage.
gross is 1583.33.
tax paid 97.43
PRSI 41.29
S&S 7.50 (sports & social)
Net 1437.11

Does this sound about right now, or am i still overpaying tax?

ClubMan · #8 10-10-2006, 08:13 PM

Try Karl Grabe's tax calculator to sanity check your salary figures.

Karl Grabe's Tax Calculator

Also check this post:

Are you paying too much tax? A guide to tax credits

Joe1234 · #9 10-10-2006, 09:25 PM

Quote:

Originally Posted by asdfg

I do not believe you should be paying any tax until next year. Tax is calc on a cumulative basis.

Tax must be deducted by the employer on whatever basis that they are notified by revenue. If the tax credits are issued on a week 1 basis then each week (or month) must be treated seperately and this has no bearing on anything that happened earlier in the year. in this case any tax refund must be claimed by the taxpayer after the end of the year.

asdfg · #10 11-10-2006, 08:10 AM

Quote:

Net Credits 2242.84

I calculate this as 186.90 pm. What does the cert from revenue say. As Joe 1234 says are you paying tax on a Month 1 basis. This will be stated on the Cert.

I still believe you should not be paying any tax until next year. Contact revenue. If you don't mind waiting till next year (Jan Feb when you can make a claim for a refund) then there is no problem but why should you. After being unemployed you probably could do with the cash especially with xmas not to far away.

Your balancing statement for next year will look something like this
Gross pay from Employment 1583*5 = 7915
Unemployment Benefit .....................4500
Total ...........................................12415
Tax @ 20% ....................................2483
Credits ..........................................3143
Tax Due .........................................NIL
Tax paid 94.43 * 5...........................472.15
Refund to you .................................472.15

mingle · #11 11-10-2006, 08:43 AM

Quote:

Originally Posted by asdfg

I calculate this as 186.90 pm. What does the cert from revenue say. As Joe 1234 says are you paying tax on a Month 1 basis. This will be stated on the Cert.

I still believe you should not be paying any tax until next year. Contact revenue. If you don't mind waiting till next year (Jan Feb when you can make a claim for a refund) then there is no problem but why should you. After being unemployed you probably could do with the cash especially with xmas not to far away.

Your balancing statement for next year will look something like this
Gross pay from Employment 1583*5 = 7915
Unemployment Benefit .....................4500
Total ...........................................12415
Tax @ 20% ....................................2483
Credits ..........................................3143
Tax Due .........................................NIL
Tax paid 94.43 * 5...........................472.15
Refund to you .................................472.15

When i started working on the 8th August, my pay day was the 24th and I was only paid for 3 weeks in which i was taxed only around 24 euros.
Then pay day 24th Sept taxed higher.

I have not received any mail from the revenue in relation to my tax, i just gave my p45 to my company.

I'll probably need to get onto them and see what the story is.

asdfg · #12 11-10-2006, 10:24 AM

If you were not working in 2006 the p45 you gave your new employer is in relation to last year. Maybe them don't realise this and entered the details in the p45 into their payroll sysyem.
Contact revenue and get them to issue a Cert of Tax credit and SRCOP. Contact payroll and see if they did the above
Something does not add up.

mingle · #13 11-10-2006, 07:57 PM

Whats the difference between
PAYE Tax Credits
Personal Tax Credits.

On the website its letting me amend these to

Current Tax Credits claimed and Incomes To amend or delete an existing Tax Credit claim or declared Income, select the claim you wish to amend/delete and click the Amend/Delete button Tax credits which can be amended onlineGross Relief Due Flat Rate Expenses 115 PAYE Tax Credit 1490 Personal Tax Credit 1630 Incomes which cannot be amended onlineAmount of Income DSFA Unemployment Benefit 4500 To amend /delete any item above which is not available online please contact the ROS Helpdesk at 1890 201 106

mingle · #14 11-10-2006, 08:02 PM

do you think because i havent done this already is why im paying tax at the moment. Cause i select amend these a new tax credit will be sent out.

asdfg · #15 11-10-2006, 09:37 PM

Quote:

Whats the difference between
PAYE Tax Credits
Personal Tax Credits.

Everyone is entitled to a personal tax credit
AFAIA the PAYE tax credit is only available to those who pay tax through the PAYE system Self employed are not entitled to it

Joe1234 · #16 12-10-2006, 09:04 PM

Quote:

Originally Posted by asdfg

Self employed are not entitled to it

Children are generally not entitled to it if they are employed by their parents.

Tenacious · #17 12-10-2006, 10:57 PM

Quote:

Originally Posted by Joe1234

Children are generally not entitled to it if they are employed by their parents.

Children of proprietary directors or of the self-employed who are employees in the family's business will qualify for the PAYE employee tax credit if they are employed in the family business for the entire year of assessment and their gross salary from the employment is at least €4,572.

Proprietary directors (a director owning at least 15% of the shares of the company) or his/her spouse do not qualify for the PAYE employee tax credit. Also excluded are self-employed individuals and individuals in a partnership in which the individual is a partner, and his/her spouse.

However they will qualify for the PAYE employee tax credit if they have a separate PAYE employment or have income from a pension.

An individual will also qualify for the PAYE employee tax credit from an employment held outside the State where the income has been subjected to a system of tax deduction similar to the Irish PAYE system, e.g. an Irish individual living in Dundalk and working in Newry for a UK company receives his/her salary after deduction of UK PAYE. This individual will be entitled to the PAYE employee tax credit.