First Steps for a Contractor’s Move to Ireland
Are you considering the move to Ireland for contract work? There are some key initial steps to implement upon arrival, ensuring a smooth transition into the Irish tax system.
Contracting Plus, Ireland’s market leader in providing compliant accountancy solutions to Professional Contractors have shared this valuable advice which will ensure you are tax compliant as a contractor in Ireland. Here are the three key actions to
Personal Public Service (PPS) Number
Firstly, you will need to apply for your Personal Public Service (PPS) number. This number is unique to you, and identifies your presence on the Irish tax system. The PPS number is also used for public services in Ireland such as social welfare, Public Health Schemes, Child Immunisation, Revenue Schemes, Housing Grants, Driver Licenses and Civil Registration Service.
Contact your Social Welfare Local Office who will assist you with the PPS number registration process. Visit the Department’s website to find your local office. You will be asked to produce documentary evidence of identity and evidence as to why you require a PPS Number.
Register with the Irish Tax Authorities
Your PPS number will also allow you register with the Irish Tax Authorities (The Revenue Commissioners). Upon receiving your PPS number, set up an online ROS myAccount with the Revenue (the Irish Tax Authority). This online account enables you to access PAYE services, add your new work and assign tax bands and credits.
You will need the following personal details to register for ROS myAccount: PPS number, date of birth, mobile number (or landline number), email address and home address.
Calculating Take Home Pay (after taxes)
The Irish Revenue Commissioners regulate tax in Ireland. The below taxes are deducted on your earnings each month:
- Income Tax
- Pay Related Social Insurance (PRSI)
- Universal Social Charge (USC)
To find out the net amount of income you will receive each month, visit the Contracting Plus Online Tax Calculator. Below is an overview of how tax is calculated in Ireland:
Income Tax /PAYE:
Income tax is calculated on taxable pay; after any expenses and pension contributions are deducted. Income tax applies at 20% up to the amount of your tax band (€35,300 being the standard individual band in 2019), and 40% on the balance.
The total amount due is then reduced by your allocated tax credits.
Universal Social Charge:
USC is a tax payable on total income. The 2019 rates of USC are applied based on the thresholds outlined below:
First band: €12,012 0.5%
Second band: €7,862 (€19,874 total) 2%
Third band: €50,170 (€70,044 total) 4.5%
Pay Related Social Insurance (PRSI):
Social insurance is used to fund social welfare benefits and pensions. It is calculated and deducted based on your earnings and is divided into different categories know as classes or rates of contribution. The two most common are A Class and S Class.
The employee PRSI contribution is usually 4%.
The employer PRSI contribution is either 8.7% or 10.95% depending on your earning level.
If you are moving to Ireland for work, it’s important that you think about tax sooner rather than later to ensure you are tax compliant from the start.
Do you want to know how to maximise your take home pay? Contracting Plus delivers a full-service