Self Employed about to get hammered in tax

[Steven Barrett]

Under the PRSI changes that are in the papers today, one of them is to increase PRSI for the self employed to 12.55% by 2028.

For the self employed earning over €100,000, they pay USC at 11% as well as 40% income tax. They will have an effective tax rate of 63.55%.


Not a good move politically for FG & FF. The Shinners are going to increase taxes as it is. FF & FG need to provide an alternative, not a boast that they have already increased taxes.

 

[NoRegretsCoyote]

They are not proposals.

These are technical papers for consultation at official level. This is done a few months before budget every year.

They don't have political endorsement or approval by any means.

 

[Sarenco]

The technical papers issued before the budget last year contained similar suggestions to dramatically increase PRSI on non-PAYE income and nothing came of it.

There is a probably a good argument for increasing PRSI on non-PAYE income by a couple of percentage points to reflect the increased social welfare entitlements that were introduced for the self-employed in recent years. However, an increase to 12.55% would be disproportionate.

The 3% USC surcharge on non-PAYE income over €100k is totally inequitable and should be scrapped (or a similar surcharge should apply to PAYE income over €100k).

 

[Brendan Burgess]

The cost of the contributory pension is huge.

For a self-employed person earning €30k, 4% or €1,200 a year to get a pension of up to €450 a week in retirement, is ridiculous.

So self-employed people do need to pay more.

But the best approach would be to take them out of the Contributory OAP system completely.

Set the rate at 10% and put it into a fund in their name. Then let them get a pension on retirement based on what they have contributed over the years. The more they put in, the more they get out in retirement.

Brendan