First paycheck isn't taxed?

SWATsqad

The tax system in Ireland is much too confusing for me, and doesn't make sense somewhat...
I started working in late April and now my next paycheck is due at the end of this month, I only was able to submit my form 12 today and it will probably not get processed before payday.
My annual salary is 46 and I have a bonus of 4k coming with the first paycheck, I do have a lot of debt to settle... Will I just get my first months income cut in half or as I understand the first month you don't pay taxes, but does that also include the bonus?

Any input appreciated!

jjjd

SWATsqad wrote: »

The tax system in Ireland is much too confusing for me, and doesn't make sense somewhat...
I started working in late April and now my next paycheck is due at the end of this month, I only was able to submit my form 12 today and it will probably not get processed before payday.
My annual salary is 46 and I have a bonus of 4k coming with the first paycheck, I do have a lot of debt to settle... Will I just get my first months income cut in half or as I understand the first month you don't pay taxes, but does that also include the bonus?

Any input appreciated!

Tax year runs from 1st January to 31st December, so if you only got your first payslip of the year now, you will have 5 months worth of tax credits/SRCOP that you can now utilise. If you haven't received your certificate of tax credits yet you will most likely be on a Week 1 basis or even Emergency Tax basis until your tax details are brought up to date.

ibarelycare

Form 12A usually takes a few weeks to process so you will be on the Emergency Tax this month most likely. Provided you have given your PPS number to your employers, you will get some PAYE relief in your first and second months of Emergency Tax as follows:

Monthly Cut-Off Point Monthly Tax Credit
Month 1 €2,817.00 €138.00
Month 2 €2,817.00 €0.00
Month 3 onwards €0.00 €0.00


So your gross pay for this month is 7,833.

First 2817 @ 20% = 563
Balance 5016 @ 40% = 2006
Sum = 2569
Less Credit (138)
Total PAYE = 2431

On Emergency tax, you pay 8% USC, so 7833 @ 8% = 627

You also will be paying 4% PRSI = 313

Gross pay 7,833
PAYE (2,431)
USC (627)
PRSI (313)
Net Pay 4,462


However if you haven't provided your employer with your PPS number, you will be paying 52% tax on your entire gross income (40% PAYE, 8% USC, 4% PRSI) so your net would be 3,760.

When you get your cumulative tax cert applied in your next payslip, you will be refunded any overpayments of tax you made while on Emergency Tax, and as the previous poster said you will also have 5 months' worth of tax credits and cut-off points accumulated.

SWATsqad

Thank you very much for clearing this up!