Tax Info / PRSI CONTRIBUTIONS 2016

Employee PRSI

  • The Class A threshold for charging the 10.75% rate of employer PRSI will increase from €356 to €376.
  • No change in the Class A €38 threshold for charging employer PRSI.
  • No change in the rates of employer PRSI for other PRSI Classes.

Class A Employee PRSI

  • The Class A employee PRSI rate of 4% remains unchanged.
  • For gross earnings between €352.01 and €424, the amount of the PRSI charge at 4% is reduced by a new tapered weekly PRSI Credit.
  • The maximum weekly PRSI Credit of €12.00 applies at gross weekly earnings of €352.01.
  • For gross weekly earnings over €352.01, the maximum weekly PRSI Credit of €12.00 is reduced by one sixth of weekly earnings in excess of €352.01.
  • There is no PRSI Credit once gross weekly earnings exceed €424.
  • Participants in Community Employment and the Employer PRSI Exemption Schemes with weekly gross earnings between €352.01 and €424 will benefit from a PRSI Credit, in the same way as other Class A contributors.
  • To accommodate the new PRSI Credit in Classes A and H, the thresholds for certain Class A and Class H subclasses are altered.
  • The new PRSI Credit will only apply to the subclasses AX, AL, HX and A7 and to those with weekly gross earnings between €352.01 and €424 in subclass A9.

Other Employee PRSI

  • A PRSI Credit, equivalent to that for Class A employees, will apply to Class H and Class E employees.
  • No change in employee PRSI for other PRSI classes.

Self-Employed Class S

  • No change to PRSI Class S.

Class K

  • No change for PRSI Class K
  • Class A employee PRSI will continue to be calculated at 4% of gross weekly earnings.
  • For gross earnings between €352.01 and €424 in a week, the 4% PRSI charge will be reduced by a new PRSI Credit.
  • The amount of the PRSI Credit depends on gross weekly earnings.
  • At gross weekly earnings of €352.01, the maximum PRSI Credit of €12.00 per week applies.
  • For earnings between €352.01 and €424, the maximum weekly PRSI Credit of €12.00, is reduced by one sixth of earnings in excess of €352.01
  • The calculation of the new PRSI charge for Class A, with gross weekly earnings between €352.01 and €424, involves 3 separate calculations:
    1. Calculate the PRSI Credit
    2. Calculate the PRSI charge @ 4%
    3. Deduct the PRSI Credit from the 4% PRSI charge
  • The following example shows how to calculate the PRSI Credit and the new PRSI charge, for gross weekly earnings of €377.

For illustrative purposes only, the following sets out the new PRSI charge for Class A employees, at €5 intervals for gross weekly earnings between €352.01 and €424.

Note 1 : This threshold only applies to Class A employees, whose total earnings/income, including if appropriate share-based remuneration, in each week of the fortnight or month are at least €38.

PRSI contribution rates from 1 January 2016

Note 3 : PRSI credit applies

Note 4 : PRSI credit applies on earnings up to €424

Class M relates to people with a nil contribution liability (such as employees under age 16 and persons in receipt of occupational pensions).

Note 2: Share-based remuneration may, in certain circumstances, be subject to employee PRSI. Employers PRSI is not chargeable on share based remuneration.

Important points to note

  • For Class A and Class H employees with gross earnings between €352.01 and €424, the amount of the PRSI charge at 4% is reduced by a new tapered weekly PRSI Credit.
  • There is no annual earnings ceiling for PRSI for employees.
  • There is no PRSI relief on pension contributions made by private sector employees.
  • PRSI relief on pension contributions paid by private sector employers remains unchanged.
  • Civil and public servants pay PRSI on the 'Pension levy' portion of their salaries.
  • Civil and public service employers do not have to pay any employer PRSI on the 'Pension levy'.
  • Employer and employee PRSI should be added together as normal. If a different subclass applies to the employee and to the employer, the return must always be made at the employee's subclass.
  • Class A employees earning between €38 and €352 inclusive a week should be recorded under Subclass AO.
  • Class A employees earning between €352.01 and €376 a week should be recorded under Subclass AX and the tapered PRSI credit applied.
  • Class A employees earning between €376.01 and €424 a week should be recorded under Subclass AL and the tapered PRSI credit applied.
  • For income of more than €424 a week, subclasses A1 and A4 as appropriate, should be returned.
  • For income of more than €500 a week, subclasses B1, C1, D1, H1, J1 and S1, as appropriate, should be returned.
  • Community Employment participants earning €352 or less a week should be recorded under Subclass A8. Subclass A9 applies when earnings are more than €352 a week. The PRSI Credit applies to Class A9 for earnings up to €424.
  • The Class J contribution normally relates to people with reckonable earnings of less than €38 a week (from all jobs). However, a small number of employees are insurable at Class J, regardless of earnings - for example, employees over age 66 and people in subsidiary employment.
  • For existing employees taken on under the Employer Job (PRSI) Exemption Scheme:
    • Subclass A6 is applied to employees earning €352 or less a week - normally insurable at Subclass AO.
    • Subclass A7 is for those earning between €352.01 and €424 inclusive a week - normally insurable at Subclass AX or AL. The tapered PRSI credit applies to Class A7.
    • Subclass A4 applies for those earning over €424 a week. This applies to employees who would normally be insurable at Subclass A1 and exempted employees who were previously insured at Class A5.
    • This scheme is closed for new applicants. The original scheme will remain in place for existing employees for the duration specified at the time of award. It has been replaced by the JobsPlus scheme, details of this scheme are available at www.jobsplus.ie. For participants in the JobsPlus scheme the appropriate rates of PRSI apply to both the employer and the employee.