How much tax will I pay?

Cruft

I've recently been offered a job at 507 euro per week. How much of that will I actually get into my bank account?

I am single, no children, no medical card, and this is my first job (was on JA for 1 year.)

Please explain this in straight-forward terms, thank you.

Peter

another question

Hi Cruft,

Tax is always complicated if you don't know anything about it but I will try to keep it as straightforward as possible and I hope my information is correct, I'm sure if I have made any error along the way, someone else will correct me but I am pretty sure this is how it will go:

Firstly you are single and going to be employed as opposed to self employed so you are entitled to the following tax credits:

Single credit: €1650
PAYE credit: €1650

Total: €3300

These are used to bring the amount of tax you are due to pay on earnings down. For example if you were to pay €5000 tax you would deduct €3300 from this and you tax payable would be €1700.

You are paid weekly so the deduction (from your tax) should be €3300/52 = €63.46 Per Week

Next you need to work out your tax liability, this is separated into three parts, 1) income tax, 2) PRSI and 3) Universal Social Charge.

1) INCOME TAX:

You will get €507 Per Week this is an annual gross income of €26,364.

As a single person you income tax rates are as follows:

Earnings up to €32,800 per annum @ 20%, therefore, you annual tax due is €26,364*20%=€5273/52 weeks = €101 Per week, then deduct your above tax credit of €63.46, this leaves a weekly income tax liability of €37.54


2) PRSI

PRSI is payable by all employed people who have earnings over €362 per week. Your earnings are €507 but you are entitled to have the first €127 of that tax free and the balance is calculated at 4%.

So, in your case per week this is how it goes:

€507 - €127 = €380*4% = €15.20 Per week


3) USC (Universal Social Charge)

This is calulated at different stages of income (gross annual income) as so:

Earnings per annum of the first €10036 are taxed @ 2%
The next €5980 are taxed @ 4%
And earnings above this are taxed @ 7%

So in you case this is done annually like the first calulation above and then we work out what this is a week:

a) €10,036*2% = €200.72
€5980*4% = €239.20
€10348*7% = €724.36


Total €1164.28/52 weeks = €22.39 Per week of USC

* The above €10,348 figure is the balance of your annual income of €26,364 after you take €10,036 and €5980 from it and the total figure of €1164.28 is the total of all the % workings.


So as a weekly guideline amount going into your bank a/c, I would estimate the following:

Gross Income: €507

Less:

Income Tax: €37.54
PRSI: €15.20
USC: €22.39

Net Income of: €431.87

another question

If you need to clarify anything on the above let me know.

Cruft

Thanks another question, superb answer! Thank you so much for taking the time to write it. It has cleared up all confusion for me.

So on my weekly payslip I should see the same amount deducted each week. Am I correct in thinking that this amount shouldn't fluctuate?

Peter

another question

No problem, I qualified from the Accounting Techician's of Ireland but no jobs for me, it's the least I can do!...Yes, your correct this amount shouldn't fluctuate but tax is always different for every person and in every case. If for example there is any chance to your personal circumstances or any change in the budget this will come into effect. Also if they overcharge you tax for any reason you will receive a tax refund at the end of the tax year.

Also, another point I think you said this was your first job? If this is the case and you have no P45 from previous employment you need to make a rather quick trip to your local tax office and ask to fill out a Form 12A, this will be forwarded to your employer after the tax office work out your standard rate cut off point and tax credits and when your employer gets this information it will save you going on emergency tax (which is a right pain). So this would definitely be the next step for you as soon as possible to prevent emergency tax.

Anything else let me know.

leviathon

Not sure if this is 100% accurate, I just tested it with my own details and it's right for me so might help?

http://www.deloitte.ie/tc

Edit: tried it with your figures and got pretty much the same as AnotherQuestion - €431 pw

namenotavailablE

Also, I've a spreadsheet in Excel 2003 and 2007 file formats. It can be downloaded from the address in my signature (only viewable when you're logged in but also accessible from the 'About me' section of my profile).
Sorry I can't show the address of the calculator in my reply- one of the moderators neither tests nor trusts any such calculators and strictly doesn't approve of any of them being linked within the body of a reply.