Help understanding pay, tax, credits etc.

Tar.Aldarion

Just got my first months pay this year, i started working in October so paid no tax last year. My wage went up more than i thought it would, it is paid monthly. Generally 12 equal payments as far as I can see. So I assume it will be the same every month, or are there cases where Jan is just higher?

Secondly, how do tax credits and such work? I paid less tax than I thought I would.
So if tax credit is xxx euro, what does that mean to tax reductions?

srsly78

Assume you earned 100,000 euros in a given year. Completely arbitrary figures here.

Assume you have to pay 50,000 euros on this. Then assume you have 5,000 euros of tax credits. This means you only have to pay 45,000 euros of tax.

To get more tax credits make sure you claim for all the stuff you qualify for: possibly bins, rent relief, mortgage interest, medical etc.

If your situation is the same for the entire year, then your monthly payslip should be the same for each month. But of course mistakes and corrections may be needed, and this may cause some months to be different. For example: if you got married during the year, or if you claimed extra tax credits you had forgotten about.

Tar.Aldarion

Thanks I rang them up, they had me exempt from USC for some reason. I must see if I qualify for any credits on their site thanks.

srsly78

Sign up for PAYE-anytime -> www.ros.ie

Tar.Aldarion

Yup thanks, have done. Have the pin unopened gathering dust at home. Can do some sort of balance statement with that I take it.

srsly78

You can claim your tax credits on it, and see which ones you are already getting.

Tar.Aldarion

Awesome thanks, great help as always. I'd like to see why I get so many.

ibarelycare

Tar.Aldarion wrote: »

Thanks I rang them up, they had me exempt from USC for some reason. I must see if I qualify for any credits on their site thanks.

If you earn less than €10,036 in a year, you do not pay USC. If you earned less than that last year then Revenue might have automatically issued you a tax credit cert with a USC exemption.

Regarding your tax credits, the majority of single people earning PAYE have just two tax credits per year; the PAYE credit of €1650, and the personal tax credit of €1650, so a total of €3300. So your gross tax for the month will be reduced by €275 (3300/12) to give you your total tax due.

Your standard-rate cut off point for the year will probably be €32,800. This means that anything you earn up to that amount (2733 per month) will be taxed @ 20%. Anything you earn over that will be taxed at 41%.

Tar.Aldarion

Cheers, think it was some mistake because I rang to say I had a medical card and they messed up. Apparently you get to keep that for 3 years after you start working. All good now. Will wait and see what credits they have me down for on their online yoke.

wmpdd3

how do you claim for bins? I've never seen that on ros.

srsly78

Oops they stopped doing that jan 2012: http://www.citizensinformation.ie/en/environment/waste_management_and_recycling/tax_relief_on_domestic_service_charges.html