ER PRSI and why am i paying it?

Shakey_jake

Hi all,

Im new to IT Contracting, before hand i was always in fulltime employment but have since switched!

Never in my life have i heard of something called ER PRSI, but yet i get taxed an heafty 300 quid every month on top of normal PRSI and Gov Inc levy!


This brings my total taxes to nearly 700quid per month!


Can someone explain what this is?? and why i pay it?



I rang my accountant, but TBH he spoke in accounting language and didnt really make much sense.


Hopefully someone here might be abl to clear it up for me in simple terms??



Thanks Guys!

MBateson

Everybody has to pay PRSI from their earnings, as an employer you also have to make a contribution to your employees' PRSI. Your previous employer would have done the same for you but you would never had heard about it as it was a cost on the employer.

professore

Ahaaa... now you can see that this thing of self employed people paying less tax than employees is not all it's cracked up to be ...

Alan Shore

Shakey,
Do you own your own company if so you should be paying class S PRSI this does not give rise to the 10.75% Employers PRSI contribution.

safetymanager

You definitely need to check this out, you should not be paying what was previously your employers contribution. You might need to get a new accountant !!!

amen

I thought as a director you could elect to not move to Class S?

MBateson

I thought you had to be on Class S if a participating director. Scope Section in the PRSI department will give a definite answer.