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Self Employed - Trading Income vs Paye Income

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  • 23-10-2018 7:54am
    #1
    UncleGobo
    Registered Users Posts: 5 ✭


    Hi,

    I am trying to figure out what exactly the difference between trading incoming and paye income when you're a self-employed proprietary director.

    Basically, for a person that owns his/her own company, invoicing for 150k per annum and, having expenses of 25k, paying himself/herself 105k (paye) and making an pension contribution of 20k what is the trading income in this case ?

    paye income is 105k I assume?

    what is the trading income ? how is it calculated ?
    where can I find info on that ?

    what rates of USC apply ?
    is the 11% only applicable for the trading income ?
    How does that work ?

    Thanks a million for clearing this up for me.
    Tagged:


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    #2
    wiggle16
    Moderators, Society & Culture Moderators Posts: 3,022 Mod ✭✭✭✭wiggle16


    If you are a proprietary director and you or the company operate a payroll on your own income from the directorship, in same way as for an ordinary employee, then that income is PAYE income. By payroll, that the tax, USC and PRSI are deducted from your income every week/fornight/month and a P35 is forwarded to Revenue detailing that.

    If you are not operating a payroll on your income as above, it is not PAYE income, but trading income.

    In the situation you have described above, it is either PAYE or trading income entirely, not a mixture of the two.

    In either case, as you are a proprietary director you are not entitled to the PAYE credit, but you can claim the earned income credit instead.


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