Payslip deducted 100% tax; is this Legal?

upforit101

A friend started a new job where she did two days work. The person no longer works at the company concerned. When payday came around she was told by her ex-employer;

"You are receiving zero into your bank account. As you have not assigned any of your tax credits to XXX company and all of your pay is being taken in tax by revenue".

Is this legal? she did two days work and is receiving no pay for it.

If emergency tax is being deducted is it not capped at 41% plus 7% USC?

Any advice about how my friend should go about getting her pay would be much appreciated.

Thanks in advance.

Howjoe1

with no tax credit all the employer is obliged to do is operate emergency tax.

the most extreme version being where the employee does not provide a PPS number, which would result in the entire income being taxed @ 41% and PRSI & USC deducted under normal rules. The net result could not be "NIL" !

Is there perhaps some other reason, eg worked 2 days on a trial basis with no income guaranteed?

upforit101

Howjoe1 wrote: »

Is there perhaps some other reason, eg worked 2 days on a trial basis with no income guaranteed?

A fixed rate of pay was agreed as is on the "gross pay" part of the payslip.

She was in touch with the wages dept of the company and enquired if she was to work any more days for the company would she be deducted 100% tax
- they replied that they didn't know if 100% tax would be deducted until after she worked for them.

Howjoe1

upforit101 wrote: »

A fixed rate of pay was agreed as is on the "gross pay" part of the payslip.

She was in touch with the wages dept of the company and enquired if she was to work any more days for the company would she be deducted 100% tax
- they replied that they didn't know if 100% tax would be deducted until after she worked for them.

I'd suggest they contact Revenue about the matter and maybe first advise the employer that they are contacting Revenue about the matter of receiving no net pay after tax etc.

namenotavailablE

Did your friend receive a payslip- she is entitled by law to one (see here). This would show the amount deducted under the various headings.

It seems impossible that 100% tax is deducted- as per the first respondent, the emergency tax would amount to a straight deduction of 48% for PAYE and USC. Depending on earnings, PRSI could be another 4% of gross.

thesimpsons

did you friend receive a payslip and a P45 ? it sounds extremely odd behaviour from the employer and tbh I'd question if they have registered the employee with Revenue? Even if no credits were assigned to the company, and no PPS number provided, even then the tax/usc/prsi would not amount to a full 100% of wages.

allthedoyles

It can happen and is legal

If a new employer puts you on a week 1 basis , or even emergency , they are allowing you a standard tax credit each week .

So after say 4 weeks , your employer receives a new tax credit cert from the tax office , and it has zero tax credits , because the credits are been used by other employers .

Then you will have received tax credits that you were not entitled to.

So next pay run , you will suffer , and depending on amount owed , the tax you did not pay in the previous weeks will be taken from you and returned to Revenue .

Whether this amount is your full wages or not will depend on how much tax is outstanding