Income tax advice

ecaf

Hi,
Just wondering if someone can explain to me how income tax works for someone who isn't on a salary, but gets paid for the hours worked a week.

They are permanent and all that (if it makes a difference), but recently has been getting less wages per week than normal, and has been told that they will be paying a higher tax rate until the end of the year.

I looked up http://www.citizensinformation.ie and I can work out how you pay tax on a salary, but I don't see where it says anything about being paid by the hour / for overtime?

Hope my question makes sense, and that someone can point me in the right direction?
Thanks.

Mr. Incognito

For 2008 any earnings up to €35,400 are taxed at the standard rate of 20%

Fom this is deducted your tax credits.
1830- single
1830- PAYE

This are divided anually and give depending on pay frequency i.e paid weekly divide by 52, monthly 12.

They are cumulative so if you haven't worked Jan-May, your credits will have been building up in effect so you'd most likely not pay tax until the threshold has been reached, using the example of beginning work in May

1830+1830= 3660/12 = 305 per month X 5 months =1520

so in effect until your tax reaches 1520 in this period you will not suffer PAYE.

PRSI is still payable at 4% unless your weekly earnings are less than €127.

Hope that helps.

ecaf

Thanks, that helps a bit, will have to check back over what he's earned so far then. Was working for the same person from the start of the year, but got moved to a different section early on which traded under a different company, so I think it might complicate things.

Mr. Incognito

Nope- won't complicate things at all. Same tax credits regardless of ten employers or none.

If they are connected they should ahve been able to pass a P45 between themselves handily enough or may have had the same payroll.