Help Calculating Tax on This Income

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Hurling Fan

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Hi All

Trying to help someone calculate their 2011 tax so they have their prelim tax correct for revenue. Figures as follows:

Married Couple with 4 kids. One person unemployed on JSB for first 13 weeks of year getting €385 per week (€5,005 in total) and then got job earning €788.45 per week for rest of year (30,749.55 in total) but responsible for their own tax. (35,754.55)

Other person works part-time as self employed earning €210 per week gross (€10,920 pa). So a total income of €46,674.55.

Presuming as they are now both self employed they only have one tax credit of €3,300. No PAYE credit. Is this correct?

PAYE

41,000 @ 20% = 8200
5674 @ 41% = 2326
Less tax credit of 3300
So total paye liability is €7226

USC

10,036 @ 2 % = 200
5980 @ 4% = 239
30,658 @ 7% = 2146
total USC = 2586

PRSI

4% of full amount = 1867

So total liability is 11679 which seems a lot in light of a fairly modest income but maybe that's just the way things are at the moment.

Know I haven't included medical expenses, bin charges or expenses that can be deducted but these are modest and not going to make a huge difference.

Am I correct is counting the Job Seekers benefit as income as know it is taxable?

thanks for your help.
 
Jobseekers benefit is taxable, but the first 13eur per week and any child dependent element are not.
 
is one person paid through paye? they should get a paye tax credit

scratch that sorry... just saw they are responsible for own tax so assume they are not an employee...
 
Hurling Fan said:
Hi All

Trying to help someone calculate their 2011 tax so they have their prelim tax correct for revenue. Figures as follows:

Married Couple with 4 kids. One person unemployed on JSB for first 13 weeks of year getting €385 per week (€5,005 in total) and then got job earning €788.45 per week for rest of year (30,749.55 in total) but responsible for their own tax. (35,754.55)

Other person works part-time as self employed earning €210 per week gross (€10,920 pa). So a total income of €46,674.55.

Presuming as they are now both self employed they only have one tax credit of €3,300. No PAYE credit. Is this correct?

PAYE

41,000 @ 20% = 8200
5674 @ 41% = 2326
Less tax credit of 3300
So total paye liability is €7226

USC

10,036 @ 2 % = 200
5980 @ 4% = 239
30,658 @ 7% = 2146
total USC = 2586

PRSI

4% of full amount = 1867

So total liability is 11679 which seems a lot in light of a fairly modest income but maybe that's just the way things are at the moment.

Know I haven't included medical expenses, bin charges or expenses that can be deducted but these are modest and not going to make a huge difference.

Am I correct is counting the Job Seekers benefit as income as know it is taxable?

thanks for your help.
Click to expand...

OK perhaps the wine has impaired my thinking, but how do you figure there's tax payable at the high rate?

The higher earning spouse can earn 32,600 and transfer up to 9,000 of the other spouse's standard rate cut off, allowing them to earn 41,600 before hitting 41% tax. And then the other spouse can earn up to 23,600 before they hit the high rate.

So the standard rate of 20% applies to all the earnings in your scenario.

Also, as Mrs Vimes says, there is 1,001 of PAYE credit due, which cancels out the tax on the JSB.

Also, I doubt that PRSI will be calculated on the JSB income either.

I can't say anything on the USC calculation, as I'm not au fait enough with USC, but based on the adjustments from the other 3 points above, your figure looks high by about 2,400.

One final comment though - how can people who are self employed be earning a regular weekly wage?? Are they actually self employed, or is someone employing them, and just telling them they have to sort their own tax affairs out...? Because that's not how it works... http://www.revenue.ie/en/business/paye/guide/employers-guide-paye-intro.html#section5
 
Thanks for all the replies. Friend very happy to see good chuck shaved off tax for this year. She thinks USC is not payable on the JSB portion either.

Regarding the self employment bit, my friend does accounts for a 4 small (all employ only a handful of people) local businesses and it amounts to about 3 hours in each company (4 in total) every week so she probably qualifies as being self-employed. Her partner is only on a fixed contract and would much prefer to be on PAYE but wasn't given the option so this would definitely have a question mark over whether it truly qualifies as self employment - probably doesn't - but to be honest I don't know too much about his circumstances.

Thanks again.

One final comment though - how can people who are self employed be earning a regular weekly wage?? Are they actually self employed, or is someone employing them, and just telling them they have to sort their own tax affairs out...? Because that's not how it works... http://www.revenue.ie/en/business/pa....html#section5 30-09-2011 07:26 PM
 
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