Student year out - tax free through a loophole?

Bottle_of_Smoke

So just started my year out, got paid for first time and didn't get taxed at all. From jan - may i worked 8 hours a week @ min wage, maybe an extra few hours here and there. Jun\july did full time min wage. Now im workin in a bank, was expecting to be taxed around E200 but all i paid was prsi.

Was thinkin bout it, since I woulda used up v little of my tax credits at the start of the year i prob won't even make the cut off point where i'll be paying any tax. Then I start next year i'll work full time until sep, be paying tax then of course but surely I'll get refunded at least some of that the following january.

Can anyone clarify any thing about this?

penexpers

Can't say for certain, but likely you'll pay no tax between now and the end of the year. That's the way it was for me when I started work around this time last year. You'll probably be refunded for next years paid tax too, but it's hard to say without actual figures.

leeroybrown

You're correct but I'd certainly not describe it as a loophole - it's a perfectly normal taxation setup that many people benefit from. You have a certain tax credit assigned to you for the year (allocated on a per week basis). The fact that you're only working for a certain number of months of the year in no way effects your right to claim your tax credits against tax paid.

AARRRGH

I used to do payroll in a previous job.

You tax is calculated on the assumption you'll be on the same salary for the rest of the year + how much you've earned so far in the year + how much tax you've paid + taking your tax credits into account.

You only get tax refunded if -

you apply for it
you have actually paid too much tax.

It is very reasonable you have paid too little tax and actually owe the government money.

I would like to point out: payroll/accounts people are the laziest people I have ever met. They also generally know very little about accounting. Assume they have calculated your wages/tax wrong because IMO (I'm paranoid about checking my tax) they nearly always get it wrong.

Repli

When you work from January-September next year, you can claim back the unused tax credits (October-December in your case) 2 weeks after you leave.

The tax year is January-December. (Most) People have about €55/week tax credits as far as I know (ie. 21% of your gross income - €55 = tax due). But the tax credits are spread out over the tax year, you can use them however and whenever you like.

kluivert

The gentleman is correct.

Tax credits are none on an accumluation method unless you are on a week 1 basis, try and avoid this if you can.

Tax will be refunded to you through this method. And each week the max refund will be your weekly tax credit.

You do not have to allpy for this refund it should be built into the system.

For example, you work for two months and pay a total paye of €200.00. You are off work for one week due to say sickness. You will then get a wage for this week but it represents a paye refund that is your tax credit of €54 or so depending on your circumstances.