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Changing job: tax, PRSI and pension

Information

In Ireland, if you are changing your job, (that is, leaving your existing job and commencing a new one), there are a number of steps you should take in relation to tax and social insurance contributions (PRSI). In addition, there are important issues to be aware of, regarding your pension.

Statement of tax

Whenever you leave a job you should get a form P45 from your employer. Your P45 form is a statement from your employer that shows your pay, tax, Universal Social Charge (USC), and PRSI details for the year up to the date you leave. When you begin work at your new job, you will need this P45 form to give to your new employer. Your new employer then takes some details from your P45 and then sends your P45 form to the tax office on your behalf. This is to notify the tax office that you have now commenced working for a new employer and ensures that they are deducting tax appropriately. When you give the P45 to your new employer, he/she will:

  • Operate PAYE in accordance with the tax credits and standard cut off point details shown on the form P45 until he/she receives a tax credit certificate from the tax office.
  • Notify the tax office that you have changed jobs so that a tax credit certificate can be issued for your new job.

If you do not give your new employer a form P45, emergency tax will be deducted.

Emergency tax

If your employer has not received either a:

  • Certificate of tax credits from the tax office or,
  • Form P45 (parts 2 and 3) from you, in respect of your previous employment,

your employer will be obliged to deduct tax on an emergency basis when paying your employee's wages or salary. This means that they will give you a temporary tax credit for the first month of employment but tax deductions are increased progressively from the second month onwards. The effect of emergency basis is that after 4 weeks, no tax credits are given and tax is paid at the higher rate from week 9, regardless of the level of pay. It makes sense therefore to avoid the emergency basis by following the simple steps outlined earlier when you start work in Ireland. Details of emergency tax rates are on the Revenue website.

More information can be found in our document about tax and starting work .

Social insurance (PRSI)

Most employers and employees (over 16 years of age) pay social insurance contributions into the national Social Insurance Fund. Social insurance contributions entitle you to a range of benefits that are administered by the Department of Social Protection. It is important therefore to inform your new employer of your Personal Public Service Number (PPS) as this will ensure that your combined social welfare contributions are recorded and that your entitlement to benefits is protected for the future. You can find more information in our document about social insurance (PRSI).

Changing jobs and pensions

Occupational pensions: If you have an occupational pension your benefits from the pension scheme may be preserved within the scheme or transferred to another scheme. Legislation requires that when a member leaves a scheme that they must be provided with a Leaving Service Options letter within 2 months of their exit from the scheme. This letter should detail any options relating to the members’ benefits. A preserved benefit means that you get a pension when you reach the scheme's normal retirement age.

If you have less than 2 years contributions to the scheme, you can get a refund of your own contributions (but not any contributions made by your employer). This refund will be taxed, as you received tax relief when you made the contribution. Before you leave your employment, you should talk to the person in the company who has responsibilty for administering the pension scheme, as each scheme has its own rules.

Personal Retirement Savings Accounts (PRSA): If you have a PRSA you can stop or start it when you choose, without charges, by contacting your PRSA provider. Your PRSA is a contract between you and a PRSA provider in the form of an investment account. PRSAs allow you to change employment and continue to use the same PRSA.

For further information, see the Pension Authority’s booklet, PRSAs – a consumer and employer's guide (pdf).

Rules

You are entitled to a P45 form when you leave work. If you experience any difficulty in obtaining a form P45 from your employer, you should notify the tax office.

How to apply

If you have difficulty in obtaining your P45 form from your former employer, contact your local tax office or contact your regional PAYE lo-call telephone service.

For information on your PPSN, contact your local social welfare office.

Occupational pensions and PRSAs are regulated by the Pensions Authority. Its free booklet What are my Pension Options?' (pdf) provides you with an overview of the pension arrangements available. In addition, this booklet sets out the options suitable in various circumstances and requirements.

If you have any queries in connection with a pension, contact the Pensions Authority's Information Unit.

Where to apply

Pensions Authority

Verschoyle House
28-30 Lower Mount Street
Dublin 2
Ireland

Tel:+353 (0)1 613 1900
Locall:1890 656 565
Fax:+353 (0)1 631 8602
Homepage: http://www.pensionsauthority.ie/
Email: info@pensionsauthority.ie

Page updated: 21 March 2013

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Related Documents

  • Your P45 and P60 certificates
    Your employer is responsible for paying your PRSI contributions and must give you a P60 or a P45 when you leave.
  • Personal Retirement Savings Accounts
    A Personal Retirement Savings Account (PRSA) is long-term personal retirement account designed to enable you to save for retirement in a flexible manner. Find out more about the rules governing PRSAs.
  • Losing your job
    If you lose your job you need to find out about the different payments and services which support unemployed people.

Contact Us

If you have a question relating to this topic you can contact the Citizens Information Phone Service on 0761 07 4000 (Monday to Friday, 9am to 8pm) or you can visit your local Citizens Information Centre.