PRSI/PAYE calculations for director of IT contractor limited company

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States

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I'm an IT contractor and have set up a Ltd company of which I am a director.

I'm paying myself €36,000 net per year. I'm using the wonderful Payback free software to calculate my salary. It shows the following monthly deductions:

Tax : €1483.33
PRSI : €240.75

For a gross salary of €4815 of the month.

Is this correst?

Thanks
 
Re: Please check my PRSI/PAYE calculations

What tax credits/allowances do you have? What PRSI class are you on? Why are you working backwards from net to gross? Do you have an accountant who can double check your figures?

For comparison purposes €4,815 p.m. gross (€57,780 p.a. gross) results in €3,348 p.m. net (€40,176 p.a. net) and monthly deductions of €1,246 tax and €222 PRSI Class A when entered into [broken link removed]. However these figures are really for a (non director) PAYE employee on PRSI Class A with the standard/basic credits/allowances so are probably not directly applicable to your situation - just pointing them out in case they help you to understand your own calculations.
 
Re: Please check my PRSI/PAYE calculations

Thanks for you response Clubman
I have no tax credit/ allowances as my spouse is benefiting from them. I am guessing that I'm class S for PRSI ( at least that is what I put into Payback to make my calculation).

I am getting anxious about paying my taxes as I haven't paid yet since I started my present work in January.

Do I have to pay my taxes now or can I wait until the end of the tax year and pay in one lump sum given that I am a director in my own company?

It's really confusing me at the moment.
I have an accountant but he seems busy (i.e. is not returning my calls)

Thanks
 
Re: Please check my PRSI/PAYE calculations

Can you post the calculations emitted from the payroll software?

I can't answer your other questions about how/when to remit tax/PRSI.

If your accountant is not giving you good service then you should look for a new one.
 
Re: Please check my PRSI/PAYE calculations

States,

You must have a cut off point of at least €20400 per annum even if your spouse is using the relevant tax credits and balance of a married couples cut off point in the amount of €38400.

Net Pay of 36000/annum = € 3000 net per month.

Monthly Cut Off 20400/12 = € 1700 taxed at 20% balance at 42%

This results in the following

Gross € 4954.72
Tax Deduct € 1706.98
Prsi S1 € 247.74

Net Pay € 3000.00


Your tax and prsi should be paid on a form P30 by the 14th of the month following the pay period, ie January, tax and prsi paid to revenue by 14th February.

You should follow clubmans advice and seek a new advisor, and contact revenue for any further clarification on dates etc.

Regards,

Ikeano.
 
Re: Please check my PRSI/PAYE calculations

Payback is showing a Gross of €4643.40.

Am I missing out on something?
 
Re: Please check my PRSI/PAYE calculations

Have figured it out.

My cut-off point was set incorrectly.

Looks like I've got the correct amount to pay revenue.

One final question - as a director of a limited company, can I choose to pay my tax and PRSI a lump sum at the end of year rather than monthly?
 
Re: Please check my PRSI/PAYE calculations

I can't tell you why but I did ask the same question at the time I set up my company and the answer was 'No'.
 
Re: Please check my PRSI/PAYE calculations

As a company director, I pay PAYE and PRSI annually. I don't get the PAYE tax credits.

Are there any accountants in the house?
 
I'm an IT contractor and director of my own company. From what I've been told you can't pay your PAYE/PRSI annually, you must pay it as you go which is what I do. However you should get a qualified accountant to advise you properly.
 
As a company director you are not entitled to claim the Paye tax credit, you do however pay a reduced rate prsi, and have greater access to expenses than most employees. In my oppinion the Paye tax credit is attempt to create equity between self employed persons / company directors and paye workers.


A small company can opt to become an annual remitter for paye/prsi purposes by sending a faxed request to the collector general on 061-488673, the CG will either approve or reject the request based on a number of factors including whether or not the company is tax compliant etc.

The optimum setup for paye/prsi payment is a monthly direct debit with revenue, it is not neccessary to submit the monthly P30 when the DD is in place thus reducing administration, and the effect of taxation on the companys cashflow is more accurately reflected.


I hope this helps,

regards,

Ikeano
 
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