self employed prsi

mickdw

For 2013 tax year, can anyone clarify the prsi situation for a self employed person earning under 5000.
There seems to be some confusion with some websites saying it's 4 percent or 500 euro whichever is greater with some online calculators showing 500 as a minimum payment even if under 5000 income. Others are applying an exemption if income is under 5000.

Citizenpain

I'd go with this --- €500 minimum

www.welfare.ie/en/.../12882_prsi2013.pdf

EDIT 1 --- sorry - I reread it and see your point now! it is unclear from that

Edit 2 --- you do not need to pay it -- http://www.welfare.ie/en/Pages/Self-Employed-Contributions.aspx

Depending on your circumstances - ( if you previously paid class S) you may apply to make a voluntary contribution

Androma1984

My take on it is this:


Income
0-4999 exempt
5000-12500 500 (Being a minimum)
12500 up @ 4%

However, I am not sure if this is fully correct. The wording on both Revenue and social welfare sites isn't great and can be a little contradictory. Please provide info link if above is wrong

mickdw

Got it clarified.
Under 5k is exempt but I was stunned to see that the 5k is before tax deductible capital assets are allowed for so you could be earning even less than 5k profit and still be expected to pay 500 euro.

Androma1984

Seems very harsh in that it is not stepped, as in one euro over the €4999 and bang €500. Where income tax might provide for marginal relief for such circumstances

dominicbrooks

Not sure this is relevant but if you pay the minimum of 500 prsi you will get the 52 weeks of S1 credits towards contributory pension

dominicbrooks

Not sure this is relevant but if you pay the minimum of 500 prsi you will get the 52 weeks of credit towards contributory pension

Gard1

the €500 contribution is put towards your contributions which decide whether you are entitled to a Contributory state pension or not. It all depends on your personal circumstances but as a self employed individual we all hope to have made some little nest egg by the time we retire. Different rules apply for when you started work etc but effectively if you don't meet the requirements for a contributory (not means tested) pension, you are subject to the hassle of a means test and potentially a reduction in your weekly pension. eg for a pensioner getting the old age pension they can have 20k in savings.for every 1k they have over this their weekly pension is reduced by €10 - therefore someone with 30k is down €100 per week.