PRSI on savings.

Discussion in 'Tax' started by DirectDevil, Mar 9, 2016.

  1. DirectDevil

    DirectDevil Frequent Poster

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    Unearned income over a certain figure is liable for PRSI as I understand it.

    Does this apply to unearned income from maturing State Savings products like savings bonds, savings certificates, instalment savings or even prize bonds wins ?
     
  2. Joe_90

    Joe_90 Frequent Poster

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    I don't think the income from any of those is taxable so would not go onto a tax return, so no PRSI.

    The level is €5,000.
     
  3. CiaranT

    CiaranT .

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    Last edited: Mar 9, 2016
    Threshold is 3,174 EUR.

    Some State Savings income is taxable for DIRT and some State Savings income is taxable for PRSI if you exceed the threshold. More details in the matrix here.
     
    Last edited: Mar 9, 2016
  4. 1dave123

    1dave123 Frequent Poster

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    I understand it is €5,000 from 2016 - was €3,174 in 2015.

    Anyone with unearned income of over €5,000 in 2016 (was €3,174) is considered to be a 'chargeable person' and is liable to pay the PRSI charge at 4% on all their unearned income. They pay the charge under Revenue's self-assessment system (Pay and File). The new PRSI charge is paid at Class K and does not entitle the person to any social insurance benefits.

    http://www.citizensinformation.ie/e...surance_prsi/social_insurance_in_ireland.html
     
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  5. CiaranT

    CiaranT .

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    Thanks, I did not know that the threshold had changed.
     
  6. DirectDevil

    DirectDevil Frequent Poster

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    Last edited: Mar 10, 2016
    Thank you for the replies.

    This arises from a review of finances that I am doing with an elderly uncle - he gets a bit worried about some of these matters !

    I have done a bit of digging through State Savings information on application forms and brochures.
    Link http://www.statesavings.ie/Pages/Forms.aspx

    The specific conditions (paragraph 4 of each brochure) seem to say clearly that there is a PRSI exemption in respect of the income from the following products ;

    SOLIDARITY BONDS.
    SAVINGS BONDS.
    SAVINGS CERTIFICATES.
    INSTALMENT SAVINGS.

    There is not the same clarity in relation to the other two products he holds namely PRIZE BONDS and a DEPOSIT ACCOUNT with An Post.

    I will run down specific answers to the 2 outstanding product queries and let you know what I find out to complete the picture.

    Heaven help an elderly saver who is not computer literate !! Worse still if you have not yet reached the age limits for exemptions !!
     
    Last edited: Mar 10, 2016
  7. DirectDevil

    DirectDevil Frequent Poster

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    Update.

    Got a document from State Savings about tax on fixed rate and prize bonds. Date October 2014. Sorry I don't have a link - working from hard copy.

    For NSB issue 1 to 3 there no PRSI on the bonus payment. There is PRSI on the annual payment if you are chargeable.

    For NSB issue 4 and 5 no PRSI.

    No PRSI on Prize Bonds.

    Presumably there is PRSI if you go over the threshold on a deposit a/c.
     
  8. Black_Adder

    Black_Adder Frequent Poster

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    Would it not be the case that these exemptions on unearned income have never applied to self employed?
     
  9. Sarenco

    Sarenco Frequent Poster

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    That's correct.

    It seems a very bizarre additional benefit of being a PAYE employee that you can now earn up to €5,000 in passive income per annum without it being subject to PRSI.
     
  10. Black_Adder

    Black_Adder Frequent Poster

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    One view is that the majority of tax payers do not file a tax return. There are about 1.8m tax payers and a huge number - 250,000 file a return. These are mainly the [OPINION: hapless/discriminated/abused/] self employed or 'chargeable person's as the Revenue term those 'required' to file a return. Imagine the problems if the 1.55m (1.8 - .25) had to file a tax return.

    I think it would be outrageous for any deranged poster to suggest that 1.55m MUST have a huge amount of undeclared income. That might be defamation of the whole country. So clearly for the avoidance of any doubt - the 1.55m have ZERO other income between them that could be taxable.

    It would also be outrageous if a deranged poster was to suggest that 1.55m SHOULD file a tax return as that would come close to patriotic duty and God help us we don't want that now do we.
     
  11. DirectDevil

    DirectDevil Frequent Poster

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  12. DirectDevil

    DirectDevil Frequent Poster

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    Just reviewing some finances and have come back to this topic.

    In relation to PRSI on unearned income what is the threshold value for 2017 ?
     
  13. Markel

    Markel Registered User

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    Revenue's Employees’ Guide to PAYE - IT 11 dated January 2017 still states that €5,000 is the limit to becoming a chargable person and having to file Form 11 and therefore pay PRSI on passive incomes such as interest/dividends. Does not appear to have been an increase.
     
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  14. Daenis

    Daenis Frequent Poster

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    The PRSI threshold is 5000 for a few years (approx. 2010), prior to that it was 3174, the chargeable person threshold was 3174 however this was not changed when the prsi threshold went up until 2016 now both are 5000.
     
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