Pay Related Social Insurance (PRSI) contributions are deducted from your income and used to fund social insurance payments, for example, State pensions. There are different rates of PRSI for different categories. Most employees pay Class A PRSI. If you are self-employed, you pay PRSI at a lower rate called Class S. PRSI for self-employed people was introduced in 1988.
People who pay Class S include farmers, professional people, certain company directors, people in business on their own or in partnerships and people with income from investments, rents or maintenance payments. Employees who are also self-employed in a trade or profession pay Class S PRSI on that income as well as their Class A PRSI contribution as an employee.
Class S contributions only cover you for a limited number of payments. In general they do not cover you for any short-term payments including illness and disability payments. They do not cover you for Jobseeker's Benefit. If you satisfy all the other conditions, Class S contributions can entitle you to:
Note that you cannot claim your State Pension (Contributory) until all outstanding payments have been made. If you are aged over 66 and still owe Class S PRSI contributions, your State Pension (Contributory) will only be paid from the date that you have paid all outstanding contributions and any outstanding income taxes in full.
The Department of Social Protection has published a leaflet PRSI for the Self-Employed - SW74.
If you are aged between 16 and 66 you pay Class S PRSI of 4% on all your income for tax purposes, that is, gross income less allowable expenses. You must pay 4% of all your income or €500, whichever is greater.
If you earn less than €5,000 from self-employment in a year you are exempt from PRSI, but you may pay €500 as a voluntary contributor (if you meet the other conditions).
You can read about employing family members in our document on social insurance.
If you are self-employed, you pay Class S social insurance contributions directly to Revenue, when you send in your tax returns for the year. Revenue then pays the money into the Social Insurance Fund and sends a record of the contributions you have paid to the Department of Social Protection.
You can request a copy of your social insurance record online. To check your social insurance record, you will need your Personal Public Service Number (PPSN).
Note that you pay Class S contributions in an annual payment for your full tax year. There is no mechanism for awarding credits for a full year or part of a year.
When you take up self-employment you should inform Revenue that you are now self-employed and you wish to register for self-assessment. You can register with Revenue as a self-employed sole trader online. Certain people can only register on paper using Form TR1 - Tax Registration form for Sole Traders, Trusts and Partnerships (pdf). When you register for self-assessment with Revenue you will automatically become registered for PRSI purposes with the Department of Social Protection. Revenue’s online service can also be used to register for employers' PAYE and PRSI and VAT, if you need to do so at this stage.
Lo-call telephone numbers for Revenue regional offices are available on Revenue's website. You can also get contact details for offices in your region.
Department of Social Protection
Tel:(01) 471 5898
Locall:1890 690 690
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.