Paye Question

joe_dunne

Hi all,

I've been self employed for a number of years now (just me in the company) and have been paying someone to do my bi-weekly books since I started.

My wife and I have gotten to a stage where we can do these things ourselves and in the spirit of the times are cutting costs and going it alone.

We still have the services of an accountant for the end of year stuff.

Am I right in thinking that the company can pay my wife up to 18K or so before she had to pay any paye? Even if i'm using her tax credits?

Also would i deduct her payment after expenses or before?

Any help would be very welcome

Thanks

Snowdrop

Hi Joe

If you are using your wife's tax credits, all of her income is taxable. The tax rate depends on cut off she has if any.

I'm not sure what you mean about expenses for your wife? Allowable expenses are non taxable. If you want to PM me details, I can give you more info.

I have a bureau but fully believe doing your own accounts is the way to go in a small business. However I would suggest you maybe book a couple of half day training sessions just to be sure you are doing the accounts correctly. One session initially and a follow up about a month or two later. A half day training with a good book-keeper should not cost more than €200. Otherwise you may find yourself having to pay your accountant a lot more at year end or worse.


Hope this helps

Kanchelskis

Am I right in thinking that the company can pay my wife up to 18K or so before she had to pay any paye? Even if i'm using her tax credits?

Also would i deduct her payment after expenses or before?

Any help would be very welcome


Joe,

You can pay your wife approx €23k @ 20% tax rate assuming that she has no other income and you are using the full allocation of her tax cut-off (i.e you have approx €45k income in yor own right). These figures may have gone up a bit in the budget.

She will be entitled to a PAYE tax credit of approx. €1,800 as well (you can't claim this), meaning that the first €9k or so of her income is tax free. Employee and Employer PRSI may also be payable on her salary.

Sorry for the approximations but I can't remember the exact amounts off the top of my head. Also, your accountant will answer these questions for you and will have specific knowledge of your position (doubtful you'll be charged for a 5 min phone conversation).

Bren1609

Hi Joe, you mentioned that you still use your accountant. He can tell you exactly what to do and that's what you pay them for. However, in relation to your question. Your assumption sounds about right provided that yor wife has the correct tax credits and cut off. e.g.

Salary 18,000

Tax @ 20% €3,600
Less PAYE tax credit €1,830
Less 50% Married tax credit €1,830
= No liability

You also need to make the distinction between company and self employed. In the first line of your post you said you were self employed and later on in the post you mentioned it was a company. There's a big difference.

Most important thing is to speak to your accountant before you do anything, it's a straight forward query and wouldn't take much time.

JoeTurner

Bren1609 wrote: »

Salary 18,000

Tax @ 20% €3,600
Less PAYE tax credit €1,830
Less 50% Married tax credit €1,830
= No liability

I'd be fairly certain wife will not qualify for the PAYE tax credit.

If it's a company and husband and wife are directors then they won't qualify for a PAYE tax credit.

Likewise, if husband is sole trader and employs spuse in business, spouse won't qualify for PAYE credit either (I've recently queried that one with the Revenue for an existing client)

Joe