Is my accountant correct?

Precedens

Hi, last year in November I have started self-employment job on top of my full time PAYE.

PAYE is 25k euro where my employer pays all taxes.
Self-employment yielded me 1350 euro and I have hired a tax company to do taxes for me. Both jobs totals in 26500 euro for 2018.

Today I've got a liability quote where I would pay 224euro for income tax, 44 for PRSI and 244 for USC.

I don't understand why I have to pay such high USC, when I have only earned 1350 euro from self employment. It would mean that on top of 20% income tax I have to even pay more than 20% for USC, where I'm under 2% USC for first 17k euro, and then 4.75% for the rest.

Can someone explain this to me? It makes little sense. Now it results in around 40% deduction from my gross income for self-employment.

thegolfer

Hi there,

There may be an under payment from your Paye income. Sometimes this happens, and is only discovered when you are submitting your tax return.

Additionally if you go to Revenue Early in the year, they will calculate your tax for you.

I would expect.
Income tax 270 at 20%
Usc 27 at 2%
Prsi 54 at 4%

Precedens

thegolfer wrote: »

Hi there,

There may be an under payment from your Paye income. Sometimes this happens, and is only discovered when you are submitting your tax return.

Additionally if you go to Revenue Early in the year, they will calculate your tax for you.

I would expect.
Income tax 270 at 20%
Usc 27 at 2%
Prsi 54 at 4%

I have contacted them. I do not think I underpaid, because company accountant always checks our tax affairs and when something comes up she actually lets us know.

I have to wait for their reply. Thank you for your post, my calculations were similar to yours.

lashes34

Will you post pay and tax details for the PAYE job to see if that looks ok?

Rulmeq

Type your figures in here if you prefer, and compare them with what was on your P60 (the difference between them is the amount that would be due on the extra income)

https://download.pwc.com/ie/budget-2019/income-tax-calculator.html

Stratvs

The USC amount is totally off even at 4.75% on the €1,350. There must have been a USC underpayment on the PAYE income and that will fall out in the end of year totals and be included in your liability. Is there any chance you originally had a USC marker on your PAYE earnings that limited you to max of 2% USC ( from having a medical card for example ) but that you were in fact liable at 4.75% and then that would come out on the year end review.

namenotavailablE

As per many posters above- it sounds as if there's some USC underpayment arising on your employment income. You can also try using any of the following calculators to get a sense of what you should see by way of deductions:

Irish income tax calculators:

My macro enabled Excel spreadsheet (Windows only and needs Excel 2010 or newer to work): http://taxcalc.eu/monthlyss/Employee...alculator.xlsm

Other calculators
Karl Grabe's web app is good for a quick calculation: http://taxcalc.eu
Hookhead's calculator is at http://www.virtualaccountant.ie/Tools/tax2019.jsp
Deloittes: http://services.deloitte.ie/tc/
Taxcalc.ie: http://taxcalc.ie/budget-2019/

It's also worth emphasising the point Stratvs makes regarding possession of a full medical card- if you have one, the maximum rate of USC is 2%.

Precedens

lashes34 wrote: »

Will you post pay and tax details for the PAYE job to see if that looks ok?

They came back to me, they made a mistake actually.

New liability is 323euro, as expected. Issue is solved. Weird that I had to correct them though.