Tax Credits

A_Sober_Paddy

So I've just started a job, the first time I've worked this year and just got a letter from the tax man.

It says my Tax Credit is €3,300.

Is that per quarter or 12 months or what?

Also in relation to USC, it says my monthly rate band is €836.34...so does that mean that anything upto that amount is tax at said rate(2%)

Its all very confusing...

I'm set to earn €830 in my first pay pack(its for a months work), so I'm just trying to figure out how much tax i'll be paying...

KCTK

A_Sober_Paddy wrote: »

So I've just started a job, the first time I've worked this year and just got a letter from the tax man.

It says my Tax Credit is €3,300.

Is that per quarter or 12 months or what?

Also in relation to USC, it says my monthly rate band is €836.34...so does that mean that anything upto that amount is tax at said rate(2%)

Its all very confusing...

I'm set to earn €830 in my first pay pack(its for a months work), so I'm just trying to figure out how much tax i'll be paying...

The tax credit is for 12 months and the USC monthly band of €836.34 is how much will be at 2%, next band will then be 4%.

Dont forget that the USC and your tax credits are culmulative so the amounts you have not used in the first 7/8 months of the year will be available against your income now thus reducing the amount of tax you will pay as against if looking at it on a single month on month basis.

here is a link with more on the USC from Revenue http://www.revenue.ie/en/tax/usc/index.html
and here is another revenue leaflet going through just about everything in the PAYE system!
http://www.revenue.ie/en/tax/it/leaflets/it1.html#section1

A_Sober_Paddy

KCTK wrote: »

The tax credit is for 12 months and the USC monthly band of €836.34 is how much will be at 2%, next band will then be 4%.

Dont forget that the USC and your tax credits are culmulative so the amounts you have not used in the first 7/8 months of the year will be available against your income now thus reducing the amount of tax you will pay as against if looking at it on a single month on month basis.

here is a link with more on the USC from Revenue http://www.revenue.ie/en/tax/usc/index.html
and here is another revenue leaflet going through just about everything in the PAYE system!
http://www.revenue.ie/en/tax/it/leaflets/it1.html#section1

So €3,300 is all I can earn tax free for the year is that correct?

KCTK

A_Sober_Paddy wrote: »

So €3,300 is all I can earn tax free for the year is that correct?

No the 3,300 is actually a credit, so this 3,300 is actually set against what your tax could be and reduced by up to 3,300 in the year. So in reality you can earn up to €16,500 tax free in the year (lower tare of tax is 20% so 20% of 16,500 is 3,300)

A_Sober_Paddy

KCTK wrote: »

No the 3,300 is actually a credit, so this 3,300 is actually set against what your tax could be and reduced by up to 3,300 in the year. So in reality you can earn up to €16,500 tax free in the year (lower tare of tax is 20% so 20% of 16,500 is 3,300)

Ok now that makes sense, cheers mate

KCTK

A_Sober_Paddy wrote: »

Ok now that makes sense, cheers mate

Not a worry man

allthedoyles

Paddy ,
As this is your first employment this year you should not pay tax , even if you were drawing benefits .

If you pay tax , prsi , usc , remember to claim all back in January when you receive P60 , if you cannot get it sorted before this .( include medical card if you have one )

Based on your info supplied here , your gross pay should equal your net pay , - you will have to pay usc , but it can be claimed back based on your earnings .

Best of luck in your new job .

A_Sober_Paddy

allthedoyles wrote: »

Paddy ,
As this is your first employment this year you should not pay tax , even if you were drawing benefits .

If you pay tax , prsi , usc , remember to claim all back in January when you receive P60 , if you cannot get it sorted before this .( include medical card if you have one )

Based on your info supplied here , your gross pay should equal your net pay , - you will have to pay usc , but it can be claimed back based on your earnings .

Best of luck in your new job .

Cheers mate, with regards to claiming back an USC can that be done on Revenue.ie(PAYE onlnie system)?

allthedoyles

A_Sober_Paddy wrote: »

Cheers mate, with regards to claiming back an USC can that be done on Revenue.ie(PAYE onlnie system)?

Not available online - Send a copy of your P60 and medical card if you have one to the local tax office .

KCTK

A_Sober_Paddy wrote: »

Cheers mate, with regards to claiming back an USC can that be done on Revenue.ie(PAYE onlnie system)?

As USC is on a culmulative basis in 2012 there should be no overpayment, monitor it with your new employer, if you are set to earn €830 every month from here to year end you wont go over the €10,036 limit in this year so you should not be paying any USC each month. If for some reason your employer does deduct USC you can reclaim as allthedoyles has outlined. But better to have the money in your pocket now than waiting on a refund from revenue

the boy hernandez

KCTK wrote: »

No the 3,300 is actually a credit, so this 3,300 is actually set against what your tax could be and reduced by up to 3,300 in the year. So in reality you can earn up to €16,500 tax free in the year (lower tare of tax is 20% so 20% of 16,500 is 3,300)

Forgive me for sounding stupid here, but I have just started a new job in August having been on Jobseekers Allowance for the whole of 2012 previously. I was under the impression I could earn somewhere in the region of the 16,500 before paying any PAYE. But my first two paychecks have deducted PAYE.

My payslip says I have a tax credit per month of 275. I understand where this figure came from e.g. 3300 annual tax credits divided by 12 months, but I don't understand why I am paying PAYE already. As I hadnt worked at all this year - Jan - Aug before starting this new job, I thought that I would just be paid PAYE free monthly until my total hit the 16,500 or whatever the figure is and then I would start paying tax. And as I wouldnt have earned 16,500 between August and the end of the year, I thought my payslips would be PAYE free for the rest of 2012.

Am I missing something? Can anyone please break this down into laymans terms for me. I've contacted the Revenue twice now and I still dont understand their answer.

Help

relax carry on

the boy hernandez wrote: »

KCTK wrote: »

No the 3,300 is actually a credit, so this 3,300 is actually set against what your tax could be and reduced by up to 3,300 in the year. So in reality you can earn up to €16,500 tax free in the year (lower tare of tax is 20% so 20% of 16,500 is 3,300)

Forgive me for sounding stupid here, but I have just started a new job in August having been on Jobseekers Allowance for the whole of 2012 previously. I was under the impression I could earn somewhere in the region of the 16,500 before paying any PAYE. But my first two paychecks have deducted PAYE.

My payslip says I have a tax credit per month of 275. I understand where this figure came from e.g. 3300 annual tax credits divided by 12 months, but I don't understand why I am paying PAYE already. As I hadnt worked at all this year - Jan - Aug before starting this new job, I thought that I would just be paid PAYE free monthly until my total hit the 16,500 or whatever the figure is and then I would start paying tax. And as I wouldnt have earned 16,500 between August and the end of the year, I thought my payslips would be PAYE free for the rest of 2012.

Am I missing something? Can anyone please break this down into laymans terms for me. I've contacted the Revenue twice now and I still dont understand their answer.

Help

You may be on what's known as a week one/month one basis for some reason rather than the normal cumulative basis. On your payslip it should say what basis you are on E (emergency), W (week one/month one) or N (normal/cumulative).

If its anything other than the cumulative basis, contact Revenue to be put on it.

Also just to clarify, are your sure you were on Jobseekers allowance rather than benefit. Allowance is non taxable but benefit is.