Employer Tax Credits proportional to # of days worked?

greep

Married couple
- 1st person working full time
- What are the "Employer Tax Credit" entitlements in the following two scenarios:
a) the 2nd person works part time (2.5 days)
b) the 2nd person works full time (5 days)

I know the 2nd person is entitled to full "Employee Tax Credits" & they can be transferred to the 1st person (if jointly assessed).

However, what about the "Employer Tax Credits"?
Are they proportional to the number of days worked, i.e. 50% if working part time and 100% if working full time?
OR a person is entitled to 100% of Employer Tax Credits even if working part time or only 1 day a week?

Thanks

tanit

There is no employer credit. There is the personal credit, that can be transferred between husbands and wives but no between cohabitating , and the PAYE credit, you are entitled to it if you are in PAYE employment (this one is non-transferable between spouses/civil partners).

If your are in employment and are entitled to the PAYE credit (there specific circumstances where you may not) the credit is not restricted due to number of days you work but it will be restricted by the income you earn during the year. If you earn less than 8,250 per year the credit will be restricted to 20% of your income creating a nil income tax liability.

Both credit are non-refundable ones which means that if the credits are higher than your tax liability they don't give rise to any refunds.

If you have any issues with transferring credits between spouses/civil partners I recommend you call Revenue, talk with your payroll people, accountant, etc as you might need more help than the one you can get in here.

IHTH

greep

Thank you very much

The €8,250 creating nil tax liability is based on PAYE tax credits only, right? (and not based on Personal + PAYE tax credits)?

tanit

greep wrote: »

Thank you very much

The €8,250 creating nil tax liability is based on PAYE tax credits only, right? (and not based on Personal + PAYE tax credits)?

It's based on using only the Paye tax credit only (and the spouse being entitled to that Paye credit) and the personal being transferred to the spouse/civil partner. There will be payments due for Prsi, and USC. If the spouse income is below 13,000 there will be no USC liability and in that case the only one paying Prsi will be the employer (it will not come out from the Employee's wages).

If the spouse works part time and their income is that low there could also be the opportunity to transfer 9,000 euros from their tax band to the other spouse and that might help as well.

If you speak with someone in Revenue and you give them the details they might give you better advice to minimise any tax payments for both of you. You are entitled to that and the advice they can give you. You can also claim 20% of your medical expenses give proper evidence and reduce even further. Talk with them it might get a a refund of taxes paid.

IHTH

greep

Thank you very much, you have been very helpful