PRSI (Pay Related Social Insurance) is an essential part of the Irish social welfare system, providing benefits like pensions, unemployment payments, and illness benefits. If you’re working in Ireland, chances are you’re paying PRSI, since it is a mandatory contribution to anyone employed in Ireland over the age of 16. These contributions go into the Social Insurance Fund (SIF), which pays for these essential state benefits.
In this guide, we will break down everything you need to understand about PRSI, from contribution classes to refunds and exemptions.
Here’s what we will cover:
- What is PRSI EE?
- What is PRSI ER?
- Who is required to pay social insurance contributions?
- PRSI contribution classes
- Where can I find my PRSI contributions record?
- How can Irish Tax Rebates help with my tax?
- PRSI FAQs
What is PRSI EE?
PRSI EE stands for “Pay Related Social Insurance – Employee,” and it’s the portion of PRSI that employees in Ireland contribute directly from their wages.
What is PRSI ER?
PRSI ER stands for “Pay Related Social Insurance – Employer.” This is the portion of PRSI that your employer in Ireland pays on your behalf. While you contribute through PRSI EE, your employer also must pay a separate amount, which goes toward the same Social Insurance Fund. Together, these contributions (yours and your employer’s) help fund important benefits in Ireland.
Who is required to pay social insurance contributions?
If you’re 16 or older and working in Ireland, you’re probably paying social insurance contributions. How much you pay depends on your income and the kind of work you do. Your employer is responsible for deducting PRSI from your wages, so it’s all taken care of before you even see it.
If you earn less or have a different type of job, like being self-employed or working part-time, your PRSI payments might differ. Your PRSI class decides what benefits you’re eligible for, so it’s important to understand how it works.
How PRSI applies to family employment
In Ireland, most workers need to pay PRSI, but the rules can change for family jobs. Family employment is when a self-employed person runs a business and hires or gets help from family members. But, if the business is a partnership or a limited company, these rules don’t apply.
Some family jobs are treated the same as regular jobs when it comes to PRSI.
- Working for a family member as an employee: If you work for a family member in a job that isn’t tied to a home or farm where you both live, you’ll need to pay PRSI under Class A or Class J.
- Apprenticeships: If you’re an apprentice working for a family member, you’ll still need to pay PRSI (Class A or Class J), even if the job is on a home or farm where you both live.
- Helping your spouse or civil partner: If you assist in running the family business without being officially employed, PRSI Class S applies, as this is considered self-employment.
Want to know if your family business qualifies for PRSI exemptions?
Who is exempt from PRSI in Ireland?
Not everyone in Ireland has to pay PRSI.
Here are some of the groups who are exempt:
- People under 16 or over 70 years old.
- Part-time workers with weekly earnings between €38 and €352.
- People sent to work in Ireland for a short time may not have to pay PRSI for up to 12 months if their country isn’t in the EU or doesn’t have an agreement with Ireland.
PRSI contribution classes
In Ireland, there are 11 different PRSI contribution classes. Each class is based on your type of work and earnings, and it affects the amount you pay and the PRSI benefits you can get.
Here’s a breakdown of all the PRSI classes:
- Class A: This is the most common PRSI class for employees. If you earn over €38 a week in a full-time or part-time job, you’ll fall under Class A. This class gives you access to a wide range of benefits, including the state pension, illness benefits, maternity leave, and unemployment payments.
- Class B: Applies to public sector employees, like doctors, and civil servants who work in the government. The PRSI payments are similar to Class A, but the pension arrangements are different.
- Class C: Applies to Army Officers and members of the Army Nursing Service who joined before 6 April 1995.
- Class D: Applies to civil servants and certain public sector workers who are not part of the state pension system. These workers usually have their own pension scheme, which means they don’t contribute to the state pension but are still covered for other benefits.
- Class E: Applies to ministers who work for the Church of Ireland Representative Body.
- Class H: Applies to members of the armed forces, such as the Army and Gardaí.
- Class J: Applies to part-time employees who earn less than €38 per week. Class J also applies to some employees, no matter how much they earn. This includes employees born before 1 January 1958, those who are over the pension age of 66, or those who are over 70 and receiving the state pension.
- Class K: Applies to people in public office who earn more than €5,200 a year. If they earn €100 or less per week, they fall under Class M instead. Class K also includes people who pay PRSI on income from things like rent or investments.
- Class M: Applies to employees who don’t need to pay social insurance. This includes people under 16, those aged 66 or older (including those who used to pay Class S), people earning €500 or less who are insured under Class K, people getting an occupational pension (only on their pension income), and people in Class K who don’t have to contribute.
- Class P: Applies to share fishermen in Ireland. These are people who work on fishing boats and get paid based on a share of the fish they catch.
- Class S: Applies to self-employed individuals, like business owners, certain company directors, and those who earn money from investments or renting out property.
– Class A Employees
If you earn €352 or less a week
Employees earning €352 or less per week are still part of Class A. Even with a lower income, you are still eligible for essential benefits like health care and unemployment support.
If you earn over €352 a week
Starting from 1st of October 2024, if you earn more than €352 per week, you’ll be charged 4.1% PRSI on the full amount. If you earn between €352.01 and €424 per week, you’ll receive a credit that reduces the amount of PRSI you need to pay. The amount of this credit depends on how much you earn. The maximum credit is €12 for weekly earnings of €352.01, and as your earnings go above that, the credit goes down by one-sixth of the extra amount you earn.
Where can I find my PRSI contributions record?
To see your PRSI contributions, log on to MyWelfare.ie service and continue to Statements, Refunds and Repayments section where you can request a contribution statement.
How can Irish Tax Rebates help with my tax?
If you’ve paid too much tax over the years, a tax rebate allows you to claim back the extra amount. This could happen if you’ve had things like medical expenses, work-related costs, or tax errors that weren’t properly accounted for. By applying for a rebate, you might be able to lower your overall tax bill or get a refund. It’s a simple way to make sure you’re not overpaying and to put extra money back in your pocket. Apply online today!
PRSI FAQs
1. What is the difference between PRSI and PAYE?
PRSI is money taken from your wages to fund social welfare benefits, like pensions and illness benefits. PAYE (Pay As You Earn) is a system where your employer takes income tax from your wages and sends it to Revenue. PRSI helps with social welfare benefits, while PAYE covers your income tax.
2. Can I withdraw my PRSI contributions?
No, you cannot withdraw your PRSI contributions, as they are used to fund the Social Insurance Fund, which provides benefits like pensions, maternity leave, and unemployment payments.
3. Do students have to pay PRSI?
Yes, students in Ireland must pay PRSI if they earn more than €352 a week.
4. Can I claim back my PRSI contributions?
You might be able to get a refund for PRSI if you paid it for someone who is over 66 or under 16 years old. You can also get a refund if PRSI was taken from an employee while they were on Maternity Leave, Paternity Leave, Parent’s Benefit, or Illness Benefit.
5. Can I claim back my PRSI contributions?
Yes, if you’re self-employed, you can pay PRSI yourself. You’ll need to pay under Class S, which covers self-employed people, including freelancers and business owners.
