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2011 PRSI and USC

  • 03-11-2012 5:49pm
    #1
    Clauric
    Registered Users, Registered Users 2 Posts: 610 ✭✭✭


    Looking for some advice regarding a friend's liabilities.

    My friend runs a small business in order to fund her social outings, etc., and so that she is no reliant on her husband for money. In 2011, she earned a net profit of €1,500 or so, after tax. Her husband now tells her she has to pay PRSI and USC on these earnings. This is because he earns about €90k per year (PAYE), with no other earnings or income.

    My understanding is that:
    A) PRSI and USC are done on an individual basis, and are not jointly assessed.
    B) USC is not assessed if the person earns less than €4,000 per year, and if they earn less than €10,000, the USC is refundable.
    C) The first €127 per week is exempt from PRSI.

    As my friend is earning approximately €30 per week, I am of the opinion that she would be exempt from PRSI and USC charges.

    Can anybody confirm or deny this?


Comments

  • #2
    Alan Shore
    Registered Users, Registered Users 2 Posts: 735 ✭✭✭Alan Shore


    USC & PRSI are charged on an individually basis.
    For 2011 USC is not payable on incomes of less than €4,004.
    PRSI is not payable unless the income exceeds €5,000.

    She would owe 20% income tax assuming her husband has utilised the relevant tax credits.


  • #3
    Clauric
    Registered Users, Registered Users 2 Posts: 610 ✭✭✭Clauric


    Just a quick follow up.

    If she sells goods and services worth about €5,500 in the year, and expenses of about €3,800 in the same year, she has a a profit of €1,500. Is the PRSI and USC, if payable, calculated on the €1,500 net profit, or the €5,500 revenue?


  • #4
    Stheno
    Moderators, Business & Finance Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 51,690 Mod ✭✭✭✭Stheno


    Alan Shore wrote: »
    USC & PRSI are charged on an individually basis.
    For 2011 USC is not payable on incomes of less than €4,004.
    PRSI is not payable unless the income exceeds €5,000.

    She would owe 20% income tax assuming her husband has utilised the relevant tax credits.

    She'd still have her personal tax credits and wouldn't owe 20% on the income she earned.

    Her tax is calculated on the profit.


  • #5
    kennyb3
    Registered Users, Registered Users 2 Posts: 6,724 ✭✭✭kennyb3


    Alan Shore wrote: »
    PRSI is not payable unless the income exceeds €5,000.

    Think its worth noting that it's usually advisable to pay the minimum prsi contribution of €253 to keep up her contribution record - most tax software would include this regardless.


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