(4) Understanding PRSI
Pay Related Social Insurance (PRSI) is paid by employees, employers and the self-employed. These PRSI contributions are used to fund various Social Welfare benefits and pensions.
Each time you pay your employees, you must deduct the employee’s PRSI contribution from their gross pay. You must also pay an employer PRSI contribution.
The amount of PRSI due depends your employee’s income and PRSI Class. Most employees are in Class A while most self-employed people are in Class S. There are other PRSI classes for various types of public sector workers.
In a previous blog, we discussed tax credits and explained how various credits, reliefs and allowances can reduce your employee’s Income Tax liability. There is a tapering PRSI credit for Class A employees earning between €352.01 and €424 a week. The maximum weekly PRSI credit is €12.
Class S PRSI contributions are 4% of all self-employed income. The minimum annual contribution for Class S is €500.
Further information on PRSI contribution classes and rates is available on the Government website.
Need more information on PRSI or help with operating your payroll? Contact GroForth for details of our payroll services.