Working for Work : Chapter 5 : Income Tax & Social Insurance

Examples to show how much tax you might pay

The following examples offer a guide to help you work out your tax. It is important to remember to talk to someone in your local tax office to ensure that you are claiming all the tax credits you are entitled to.

Example 7:

Tom and Jane are married with 3 children. Tom had been claiming JA for over 12 months, but is now taking up a job with an annual salary of E27,500 and overtime of E4,500. Tom has also qualified for Revenue Job Assist. Jane remains at home caring for their children. Tom's tax bill is calculated as follows;

Calculating PAYE

Tom and Jane's gross income (Wages + Overtime) €32,000.00

Taxed @ 20% standard rate €6,400.00

Tom and Jane's tax owed before tax credits are deducted €6,400.00

Tom's Revenue Job Assist personal allowance €3,810.00

Revenue Job Assist child allowance (E1,270 x 3) €3,810.00

Revenue Job Assist total €7,620.00 @ 20% standard rate €1,524.00

Married couple's tax credit €3,300.00

Plus Tom's PAYE tax credit €1,650.00

Plus Revenue Job Assist credit €1,524.00

Plus Jane's home carer's tax credit €810.00

Tom and Jane's total tax credits €7,284.00

Tax owed before credit deducted €6,400.00

Minus tax credits - €7,284.00

Tom and Jane's tax bill per year €0.00

The Universal Social Charge (USC):

€10,036 @ 2% €200.72

€16,016 - €10,036 (€5,980) @ 4% €239.20

Balance (€11,484) @7% €803.88

Total USC €803.88

 

i Note: Tom and Jane's Tax Credits were more than their PAYE owed, so they do not have to pay any PAYE. The Revenue Job Assist tax allowance is reduced over a three-year period. In the second year it reduces to two thirds and reduces to one third in the third and final year.

 

Calculating PRSI

Tom's gross weekly income (€32,000 ÷ 52) €615.38

Minus weekly PRSI allowance - €127.00

PRSI assessable weekly income €488.38 PRSI @ 4% of assessable earnings (Sub-class A2 see *below) x .04

Weekly PRSI deduction €19.54

Annual PRSI deduction (€19.54 x 52) €1,016.08

Calculating Tom's net annual income after PAYE, PRSI and USC

Tom and Jane's total gross annual income €32,000.00

Minus PAYE - €0.00

Minus PRSI - €1,016.08

Minus Universal Social Charge (USC) - €803.88

Tom and Jane's net annual income €30,180.04 Tom and Jane's net weekly income (€30,180.04 divided by 52) = €580.38

 

i *Note: Because Tom was claiming Jobseeker's Allowance for over 12 months, he will keep his Medical Card entitlement for three years. When Tom no longer qualifies for Revenue Job Assist, he will no longer be eligible for a Medical Card.

Last Updated: 01/09/2011 ^ back to top