How is PAYE calculated in Ireland?
PAYE is the income tax part of your payroll deduction. In most simplified scenarios, it applies 20% up to the standard rate cut-off and 40% above it, then reduces the liability using your tax credits. Filing status and credits can change the result.
Why does pension reduce PAYE but not USC?
Many pension contributions reduce taxable pay for PAYE, but USC is typically calculated on gross income and is not reduced by pension contributions. The exact treatment can depend on the pension type and payroll setup.
What is PRSI and why does it matter for take-home pay?
PRSI is a social insurance contribution usually calculated on gross pay. It matters because it reduces take-home pay even when PAYE is reduced by credits or pension contributions.
Why can my marginal deduction be higher than 40%?
The next euro you earn can be charged to PAYE, USC, and PRSI at the same time. When these charges stack together, the combined marginal deduction can be higher than 40%.
How does being married change PAYE, USC, and PRSI?
Marriage can change PAYE bands and credits depending on assessment type and whether there is one income or two incomes. USC and PRSI are still calculated on each person’s income.
How is a bonus taxed in Ireland?
A bonus is usually taxed like salary: PAYE at your marginal rate plus USC and PRSI. In a bonus month, deductions can look higher because thresholds are crossed in one payslip.
Why is my net pay different from one month to the next?
Payroll is often cumulative. A one-off bonus, changing credits, starting or stopping a pension, or moving into a different USC band can all change the month-to-month result.
Do tax credits reduce USC or PRSI?
Tax credits generally reduce PAYE only. USC and PRSI are calculated separately using their own rules.
Do company benefits (BIK) affect PAYE, USC, and PRSI?
In many cases, BIK increases taxable pay and can increase PAYE, USC, and PRSI. The exact treatment depends on the benefit and payroll setup.
How do multiple jobs affect PAYE, USC, and PRSI?
Multiple employments can affect how credits and rate bands are allocated. If credits are not allocated as expected, PAYE can look higher. USC and PRSI can also change depending on combined income and thresholds.
Is this an official payslip calculation?
No. This is an estimate for planning scenarios. Your employer payroll settings and personal circumstances can change the final numbers.
What inputs usually change the result the most?
Gross salary, filing status, tax credits, pension contributions, and one-off pay like bonuses typically have the biggest impact on the breakdown.