Rates of PRSI and USC due on rental income

C

CharlieMac

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I've searched through previous threads and looked at Revenue guidance documents but it's still not clear to me so would appreciate any help on this.

I've been earning rental income since 2008. I'm trying to figure out the rates of PRSI and USC that applied to that income since then.

During this time I also had "earned" income on a separate employment and paying PRSI Class A1 on that income.

Was the rental income always due PRSI at Class K and was that chargeable on the rent no matter how much rent I received?

I'm not sure was I due to pay Prsi on the rental income at Class K or was it Class S instead and did any minimum thresholds apply in terms of how much rental income was earned?

What rates of Class S (or K) applied to rental income I received since 2008. When was USC first applied to rental income and how?
 
@S class is the expert on this stuff and I'm sure that they'll be along soon... :D

The answer may depend on the amounts of each type of income received so you might want to post indicative figures to assist?
 
Checking back through my tax returns.

Class K started in 2014. This was at 4%.
Invented by Michael Noonan. Prsi charged and absolutely no benefits given.

USC was invented by Brian Lenehan a few years before this.

For any year you had class A contributions your rental was class K for that year.

There is no minimum payment for class K. The 4% applies on all unearned income.

I don't know if class S was applied to rental income before 2014.

Class S on rental only applies if the rental income is over 5k and you have no class A or class M contributions for the particular year.

I think if you have rental income below 5k class K applies to all the rental income.
 
ClubMan said:
what's the rationale for PRSI classes (K and M I think?) that offer no benefits?
Click to expand...
Class K is an easy source of extra revenue that most victims didn't notice.

Micheal Noonan was an expert at inventing unfair revenue sources. Class K and the private pensions raids for example.

Class M is zero rated so probably should not exist.
But it has resulted in lots of early retirees with unearned income who need extra contributions for the COAP, unfairly paying class K instead of class S.
 
Can I also get this information from my PRSI record? I downloaded that sometime last year from Revenue online.

Here it is going back from 2023 to 2008:

YearPaid ContributionsReckonable Contributions for Pensions
202354A52
202255A, 52K52
202152A, 52K52
202052A, 52K52
201952A, 52K52
201852A, 52K52
201752A, 52K52
201652A, 52K52
201552A, 52K52
201452A, 52K52
201352A52
201252A52
201152A52
201052A52
200952A52
200852A52

Can I take it from this record that I didn't pay any PRSI on rental income I received from 2008 to 2013?
If I had then I suppose it would be mentioned in the "Paid Contributions" column, probably as 52S?

Looks like since 2014 that "unearned" rental income has been liable for Class K PRSI but not liable for any PRSI before then?

On CitizensInformation.ie they mention this about "unearned income".
"From 1 October 2025, unearned income from rents, investments, dividends and interest on deposits and savings is liable to PRSI is at 4.2%.

Until 30 September 2025, anyone with unearned income of over €5,000 is considered to be a 'chargeable person' and is liable to pay the PRSI at 4.1% on all their unearned income.

They pay the charge under Revenue's self-assessment system (Pay and File).

PAYE taxpayers who are not considered 'chargeable persons' by Revenue are not liable for the PRSI charge. A person is not a 'chargeable person' if their income from non-PAYE sources is less than €5,000 and this income is taxed under the PAYE system."

So taken together, would all of that suggest, that since 2014, I would only have been due to pay Class K PRSI on rental income if greater than €5,000?
 
Were you always collecting more than €5K in rental income p.a. starting in 2008?
If so then I presume that you were always doing Form 11 self-assessed returns and declaring that income in addition to all other sources of income?
That being the case then presumably your PRSI contribution statement is correct/accurate?

Bear in mind that even if you had additional PRSI contributions from 2008 to 2013 then they not improve your Contributory Old Age Pension situation as you already have the maximum 52 reckonable contributions for those years.
 
I've been doing tax returns as long as it has been rented out yes.

Taxable "Rental Income" = Gross Rental Income - (Expenses + Capital Allowances).

What they call the Case V Rental Income. I think I'm right about that?

I found some info on when Rental Income became liable for PRSI. In the PRSI Contribution Rates and User Guide 2014.
"In Budget 2013 it was announced that from 1 January 2014, the exemption from PRSI applying to employed contributors and occupational pensioners (whether that pension arises from that person’s own employment or the employment of his or her spouse or civil partner) under 66 years, whose only additional income is unearned income, will be abolished. This means that unearned income such as rental income, investment income, dividends and interest on deposits and savings will be liable to PRSI."
Click to expand...

Employed contributors and occupational pensioners, aged under 66 years, whose only additional income is unearned income are liable to PRSI on such income at Class K.
Click to expand...

So in the case of a PAYE worker already paying Class A PRSI who also had some rental income... prior to 2014 that rental income was not liable for PRSI. After 2014 it became liable at Class K.

Regarding if a €5000 minimum applies to rental income liable for Class K PRSI...

In my case there have been several years when the taxable rental income was less than €5,000. Looking back on my 2014 tax return now I see the taxable rental income was less than €5000 but my accountant DID put in for me to pay PRSI @ 4% on that income.

Looking through the PRSI User Guide 2014 it seems pretty clear that €5,000 threshold only applies to Class S, which is the self-employed PRSI class. If a person's only additional income is rental income, and they have no Class A or Class M contributions in that year, and rental income exceeds €5,000, then they are Class S. As I've been paying Class A PRSI from my employment I cannot be Class S so the €5,000 threshold is not relevant in my case.

1765225934256.webp


Now I just need to figure out how and since when USC and the Income Levy and Health Levy applied to rental income!
 
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I ceased PAYE employment in Feb 2009. I have 7 class A PRSI contributions on my record for that year. I have no other PRSI contributions for that year. I also had rental income >5k that year and I would have submitted a paper form 11 tax return and paid the demand. I have 52 class S PRSI contributions for 2010. I subsequently left the country and claimed exemption from PRSI on the rental income as a non-resident.

Are the 7 Class A contributions correct or should I have been credited 45 Class S contributions or was it the case that once I had even a single week of class A, that my rental income was not liable for any PRSI in the whole year? In retrospect it would have been better if they had charged me class S PRSI and back then I knew nothing of voluntary PRSI contributions. I suspect the 7 class A and nothing else is correct, but I'd like one of resident experts here to confirm so I know there's nothing to chase up with the DSP.
 
@murphaph1
According to AI

"Class K PRSI was introduced in Ireland on 1 January 2011. It was implemented as a solidarity measure targeting specific public office holders (such as TDs, Senators, and the Judiciary) with incomes over €5,200 annually who were previously exempt from PRSI, requiring them to pay 4% on all"

It then was extended to include certain types and mixtures of unearned self employment. I believe this was done in 2014.

Because you have 52 class S in 2010 obviously class S did apply to rental at that time.

So the problem of unearned self employment being converted to class K could not exist in 2009, it seems probable that you should have been entitled to 52 class S for 2009.

Check your 2009 form 11. If Prsi was charged on your rental income, you should have 52 class S for 2009.

If no Prsi was charged maybe it did not apply to a person with class A employment.

You should appeal this to DSP. Even if only to get clarification of the rules.
 
Ok much appreciated. I will ask my scope officer to look into it for me. She has been an absolute star digging up records for my missing "teenage years" PRSI so I am sure she will clarify the situation for me on this too. I'll report back. I found the statement Revenue sent me. PRSI was not charged on my rental income in the year concerned BUT if I can get the DSP to accept that I was a chargeable person for PRSI for the 45 weeks I was not in PAYE employment but DID have >5k rental income then I could request to pay that PRSI that Revenue incorrectly failed to charge me. It seems logical to me that this would be the case but as we all know, the rules around PRSI are anything but logical. I'd be more than happy to pay 3% on the rental income or the minimum €500 to get the missing 45 stamps. I am going to be really close to the 2080 when I hit 66 I feel.
 
My scope officer says they can't deal with this until I go through Revenue, make the payment and then provide proof of payment so the DSP can update my record. She was not sure if the handful of class A in 2009 legally prevent me from paying class S on the rental income for the entire year. I've sent an enquiry through myEnquiries on ROS but judging by some other posters' experiences it may take some considerable time before they respond. Ah well, I am in no rush I suppose. It's a lesson to anyone though to get your PRSI record clarified in good time before retirement. These things take months to clear up if there is an issue.
 
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