Your payslip

Your payslip, explained

How income tax, USC and PRSI come off your pay, and why the figures change.

• How much of your next €100 you keepIncome tax, USC and PRSI together take a share of each extra euro you earn. That share is your marginal deduction rate.
• How a bonus is taxedA bonus is pay. It's taxed in the pay period you get it, at your marginal rate (the rate on your next euro).
• Tax on a sign-on bonusA joining bonus is taxed as pay through PAYE, in the period it's paid.
• Tax on commissionCommission is taxed as pay, at your marginal rate (the rate on your next euro), in the period it's paid.
• Overtime and the higher rateOvertime is taxed like basic pay. Only the hours that cross into the 40% band pay 40%.
• Is there a pay-rise tax trap?In almost all cases a rise leaves you better off. The exceptions are a few cliff edges.
• Two jobs: how credits and band are sharedYour credits and 20% band can be split between jobs. If they all go to one, the other is taxed at 40%.
• Why your second job pays 40%Because your credits and band are usually all on your main job.
• Splitting credits between jobsHow to move tax credits and band between jobs in myAccount.
• Starting a new job mid-yearRegister the job in myAccount so your employer gets your credits and you avoid emergency tax.
• P45s no longer existSince 2019 Revenue gets your pay details in real time, so there's no P45 to hand over.
• Emergency tax on your payslipHigh deductions because your employer has no payroll notification for you. Usually fixed in days, and refunded.
• Week 1 or month 1 basisEach payslip taxed on its own, with no catch-up for unused credits until the year ends.
• Why your payslip is cumulativeEach payslip looks at your whole year so far, so deductions even out.
• Is there a tax code on an Irish payslip?No: Ireland uses tax credits and a rate band, not a tax code.
• The tax credits on your payslipCredits take your income tax down euro for euro. Your employer uses a weekly or monthly share of them.
• Your credits aren't being appliedUsually your employer hasn't got your latest payroll notification, or your credits are all on another job.
• Why your take-home pay changedThe common causes: new credits, a new year, a PRSI rate change, overtime, or emergency tax.
• Why your PAYE changedYour income tax deduction changes when your credits, band or basis change.
• PRSI in 20264.2% until 30 September, 4.35% from 1 October, with a credit for lower earners.
• Taxed perks on your payslipPerks such as a company car or health insurance are added to your pay for tax.
• USC and pension contributionsPension contributions reduce income tax but not USC or PRSI.
• Salary sacrifice into a pensionGiving up salary for an employer contribution saves income tax, USC and employee PRSI.
• Tax on back payBack pay is taxed through payroll when it's paid. If that means too much tax, ask Revenue to look at the years it was for.
• Tax on a backdated pay riseA backdated rise is taxed like back pay: through payroll when paid.
• Tax on a lump sum when you leaveStatutory redundancy (the minimum set by law) is tax-free. Other payments when a job ends can be partly tax-free. The rest is taxed as pay.
• Tax on unused holidays paid outWhen you leave, pay for annual leave you didn't take is taxed as ordinary pay.
• Tax refunds and holiday payIf you work part of the year, unused credits may mean a refund at year end.