Every working citizen is required to file a tax return every year; but as a nation it is not in our culture to do so! While it is a pre requisite of Self Employed and Company Directors, PAYE workers assume that their tax affairs are taken care of and there is no need to file a tax return. This could not be further from the truth!
PAYE Workers
Most employees pay tax through the PAYE (Pay As You Earn) system. This means that your employer deducts the tax you owe directly from your wages, and pays this tax directly to Revenue. Revenue collects taxes from citizens on behalf of the Irish Government.
You will also pay PRSI and the Universal Social Charge on your income. Tax is payable on earnings of all kinds that result from your employment (including for example, bonuses, overtime, non-cash pay or benefit-in-kind such as the use of company car, tips or Christmas boxes.
You do not pay tax on: scholarship income, interest from savings certificates, savings bonds and national installment savings schemes, and payments to approved pension schemes.
Tax Credits and Reliefs and Bands
Income tax reliefs reduce the amount of tax that you have to pay. Here are some of the tax reliefs that relate to employment:
- Tax Credits: All PAYE taxpayers are entitled to a tax credit known as the PAYE Tax Credit. This is worth €1,650 in 2015. If you are married and taxed under joint assessment, then you and your spouse may both claim the PAYE Tax Credit.
- Flat rate Expenses: directly related to the nature of the employment. These can be deducted from your income before it is assessed for tax. For example a nurse is entitled to €733 expenses and is sometimes referred to as “the uniform allowance.”
- Pensions: Contributions to a pension are eligible for tax relief.
- Income tax bands:
| 2015 | ||
| 20% | 40% | |
| Single Person | €33,800 | Balance |
| Married couple/civil partners, one income | €42,800 | Balance |
| Married couple/civil partners, two incomes | Up to €67,600 (depends on second income) | Balance |
| One parent family | €37,800 | Balance |
How Rockcourt can help?
Its amazing how many people are over paying tax and don’t even know it! Rockcourt advisers are trained to spot tax abnormalities on a client’s payslip. We can advise on the various reliefs that can be sought, such as medical visits, and how to go about claiming your entitled tax back.
If required, we can also provide a service where a qualified accountant can file your previous four years tax return for a fee of €200 (for PAYE workers. Terms apply).