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Week 1 tax basis.

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  • 18-04-2021 6:50pm
    #1
    defiantdancer
    Registered Users Posts: 125 ✭✭


    Hello there,
    I have recently started a new job and have been placed on a week 1 tax basis by Revenue. Does anybody know the reason why and is it possible to change it to a cumulative tax basis with Revenue?
    Advice gratefully received. Thanks in advance.


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    #2
    spuddy4711
    Registered Users Posts: 411 ✭✭spuddy4711


    Good explanation of possible reasons on Revenue website.


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    #3
    defiantdancer
    Registered Users Posts: 125 ✭✭defiantdancer


    Yes, I did look at the Revenue website.i was also wondering had anybody else been in the same position and how difficult is it to move from a week 1 basis to a cumulative tax basis?


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    #4
    GarIT
    Registered Users Posts: 8,671 ✭✭✭GarIT


    The reason is you changed jobs.

    You just have to ask to change. You may have to pay a lot of tax in the first week if you have underpaid, or you may get a big refund.


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    #5
    markmoto
    Registered Users Posts: 788 ✭✭✭markmoto


    defiantdancer wrote: »
    Hello there,
    I have recently started a new job and have been placed on a week 1 tax basis by Revenue. Does anybody know the reason why and is it possible to change it to a cumulative tax basis with Revenue?
    Advice gratefully received. Thanks in advance.


    Have a look link below, don't worry if you over paid you can claim some back next year.


    https://www.revenue.ie/en/jobs-and-pensions/starting-your-first-job/week-1-basis.aspx


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    #6
    markmoto
    Registered Users Posts: 788 ✭✭✭markmoto


    defiantdancer wrote: »
    Yes, I did look at the Revenue website.i was also wondering had anybody else been in the same position and how difficult is it to move from a week 1 basis to a cumulative tax basis?


    Once revenue establish your average, next year you will get your tax adjusted. Anything over paid could be claim back next year.

    Guess you didn't work for a while.


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    #7
    collsoft
    Registered Users Posts: 253 ✭✭collsoft


    Were you by any chance on the Pandemic Unemployment Payment (PUP) or any other social welfare payment before you started your new job?

    If so then that is why you are being taxed on a Week 1 Basis.

    Revenue have a video on their youtube page which explains how and why it happens after PUP

    https://www.youtube.com/watch?v=S3RNq2zTgFA

    But as others said, there are many reasons why this would be
    defiantdancer wrote: »
    Hello there,
    I have recently started a new job and have been placed on a week 1 tax basis by Revenue. Does anybody know the reason why and is it possible to change it to a cumulative tax basis with Revenue?
    Advice gratefully received. Thanks in advance.


  • Options
    #8
    DmanDmythDledge
    Registered Users Posts: 883 ✭✭✭DmanDmythDledge


    markmoto wrote: »
    Once revenue establish your average, next year you will get your tax adjusted. Anything over paid could be claim back next year.

    Guess you didn't work for a while.
    Completely incorrect, if its current year you can get your basis changed more or less straight away and any tax overpaid refunded in next payslip


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    #9
    markmoto
    Registered Users Posts: 788 ✭✭✭markmoto


    DmanDmythDledge wrote: »
    Completely incorrect, if its current year you can get your basis changed more or less straight away and any tax overpaid refunded in next payslip


    Nope, its correct, I had that issue before worked 6 month till end of year on wk1 basis.


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    #10
    ari101
    Registered Users Posts: 2,835 ✭✭✭ari101


    markmoto wrote: »
    Nope, its correct, I had that issue before worked 6 month till end of year on wk1 basis.

    Only forced to stay on week one/month one in unusual circumstances; TWSS and PUP caused this last year. If you have been put on W1/M1 when changing job, and you ask to go back to cumulative, they normally switch you back straight away.


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    #11
    markmoto
    Registered Users Posts: 788 ✭✭✭markmoto


    ari101 wrote: »
    Only forced to stay on week one/month one in unusual circumstances; TWSS and PUP caused this last year. If you have been put on W1/M1 when changing job, and you ask to go back to cumulative, they normally switch you back straight away.


    A while ago worked abroad for a few years, when come back mid July they put me on wk1 till end of year. Hope it helps.


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    #12
    GarIT
    Registered Users Posts: 8,671 ✭✭✭GarIT


    markmoto wrote: »
    A while ago worked abroad for a few years, when come back mid July they put me on wk1 till end of year. Hope it helps.


    If you asked to change they would have done it.


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    #13
    collsoft
    Registered Users Posts: 253 ✭✭collsoft


    Well, I cant say if you are right or wrong, but it might not be as easy as you think to get put back on a cumulative basis as you think.

    In a normal year, with a normal social welfare benefit this might be the case - take for example maternity benefit, this could be done.

    The problem with PUP is that if you are receiving a PUP benefit of €350 and you are on a single persons tax credits then your tax credits will not be enough to pay your tax bill.

    PUP at €350 per week attracts a tax bill of €70 per week.

    A single person with regular credits has an annual tax credit of €3300 per year. That is €63.46 per week - it is not enough to pay your PUP tax liability each week.

    For other benefits such as Maternity or regular Jobseekers the level of benefit is much lower than PUP (Jobseekers is €203 per week, PUP can be €350 per week) so your credits will pay your tax bill and still have some left over.

    PUP is not the same.

    If you are on the top rate of PUP and you ask Revenue to move you onto a cumulative basis then you will have a few weeks of pain as Revenue claw back all the tax you owe on PUP.

    If you stay on a Week 1 basis then you will finish out the year owing no tax or possibly entitled to a refund.

    If you move to a cumulative basis now you will have a sharp adjustment now, and no tax bill at the end of the year

    If you stay on a Week 1 basis the you will either end the year balanced, or entitled to a tax refund.

    I cant tell the future. Perhaps we really are at the end of the pandemic and when we all get back to work that's it.

    But, what if it's not?

    What if as we head back into the Autum/Winter that Covid flares up again and we have to go into another lockdown?

    If people go back onto PUP they will start building up a tax bill again.

    If it was me, I would rather pay a bit more tax now and get it back at year end than take a big hit now to be balanced, but leave myself open to another bill at the year end.

    But hey, If I could tell the future I wouldn't be doing this stuff and I would have won the lotto a million times over

    :)

    Jason
    DmanDmythDledge wrote: »
    Completely incorrect, if its current year you can get your basis changed more or less straight away and any tax overpaid refunded in next payslip


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    #14
    Sunrise_Sunset
    Registered Users Posts: 1,211 ✭✭✭Sunrise_Sunset


    I started a new job last year and was placed on Month 1 until the end of the tax year. I emailed revenue about it and their response was "to avoid hardship". At the start of the new year I was moved to cumulative. I also got a decent tax refund.


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