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how little you have to earn to avoid tax

  • 27-03-2008 6:06pm
    #1
    e04bf0c3
    Registered Users, Registered Users 2 Posts: 10 ✭


    I know there's information about this everywhere but i cant figure it out. I've worked for the same company for three years, never earning more than ten euro and rarely working full time. As a result of this i have never been taxed. If i start a new job, working forty hours a week and earning ten euro and hour, will i be taxed? Or what is the most i can earn per hour and still not get taxed?
    Hope that makes sense, any help much appreciated!


Comments

  • #2
    Tails142
    Registered Users, Registered Users 2 Posts: 2,119 ✭✭✭Tails142


    You get a Tax Credit Certificate from the Revenue Commissioners.

    Assuming yours is the same as mine; it works as follows.

    The Standard Rate Band is 35,400. That means you pay 20% tax on anything up to this amount.

    However you get tax credits for the year, mine totalled $3,660. And from what I gather this is the basic for a single person living at home.


    So... say you're earning 10 euro an hour, 40 hours a week. That's €400 a week you're earning. 52 weeks in the year.


    You will be charged €400x20% = €80 in tax

    But your tax credits are €3,660/52weeks = €70.38

    So in this instance you will pay roughly a tenner in tax. However tax credits run from January to December. So if you havent been working very much you probably havent been using your tax credits. You will get a P60 from your last employer and you give it to your new employer who will work out how much tax you've paid and spread your tax credits out over the rest of the year.

    So if you havent worked this year and start work in april, there will be 8 months left in the year or 32 weeks (roughly). So your tax credits would be €3,660/32 = 114.37 a week

    In this case that means you could earn 571.85 a week without paying tax. ([114.37 / 20]x100=571.85)


  • #3
    chris85
    Registered Users, Registered Users 2 Posts: 4,502 ✭✭✭chris85


    e04bf0c3 wrote: »
    I know there's information about this everywhere but i cant figure it out. I've worked for the same company for three years, never earning more than ten euro and rarely working full time. As a result of this i have never been taxed. If i start a new job, working forty hours a week and earning ten euro and hour, will i be taxed? Or what is the most i can earn per hour and still not get taxed?
    Hope that makes sense, any help much appreciated!


    Ok OP you need to find out how much exactly your tax credits are. You can find this out by a quick call to the Revenue.

    To not pay tak at all, 20% of the salary of the fulltime job must be less than the tax credits you have.

    For example if you have tax credits of €5000/annum and your salary is €20000/annum. The tax is 20% of €20000 which is €4000 so you would not get taxed at all. This example will change for different salary and credits

    This is assuming you will be on the lower band of tax of 20% which is below €35400.

    You will have to pay some PRSI but this is little so dont worry bout it.

    Does this make sense


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