Declaring income from nixers to Revenue

Escapees

My partner has a part-time job from which she earns €14k a year. However, she often minds children in the neighbourhood, for which she gets paid in cash. The cash from this unofficial 'work' has accumulated to a few grand over the last few years.

Since COVID came along, we've gotten used to paying for everything with our cards and that's why the cash has built up. Rather than switching back to using cash to pay for things, we'd prefer at this stage to just get the cash out of the house and bank the money.

She is thinking of doing an income tax return with Revenue and declaring all the cash received (around 3k) as non-PAYE income from this year. It's our understanding that there wouldn't be any PAYE tax due as her tax credits amount to around 3.5k, but she would have to pay USC alright which would be a relatively small amount.

We're not sure though what is due from a PRSI point of view, since she can't easily prove that the income was received in small amounts over a long period of time. Also, since no employers PRSI would have been paid on the income, does she become liable for this too?! And might Revenue want to know more information on which families paid her for the childminding work?

Finally, is there anything at all that we're overlooking here from a tax liability point of view?

TIA.

Declare the additional income in a PAYE tax return (Form12) in her MyAccount at www.revenue.ie

She doesn’t pay employers PRSI

Revenue will add the untaxed income to her employment income for the year(s) in question, calculate what income tax/usc/prsi is due, and likely reduce her future tax credits to recoup any taxes owed.

Escapees

Thanks for responding. We can use an annual income tax calculator so to work out the tax and PRSI due. The only odd thing is that it would seem that Revenue loses out on the employer's PRSI contribution that will never have been paid. I know the amounts are small here but it seems strange all the same.

hjr

I presume she should look into this:

CramCycle

Since it is under 5k, just declare it on your income tax return at the end of the year. If it is over a few years, go back on myaccount and declare it there. 3.5k over 3 years isn't a huge amount per year, so just go back in and put it in your returns, you might have a small amount to pay but it is unlikely unless you are jointly assessed.

https://www.boards.ie/discussion/comment/121222366#Comment_121222366

It's not odd, Revenue doesn't get any employers prsi for any self employed individuals. You don't need to work out the tax due, put the income into the tax return and Revenue will do the calculations for you.

Escapees

Ok, so she would be treated as being self employed so from a PRSI perspective. I guess that the min contribution of 500 quid may be due then, which is almost a 20% tax rate...