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Employer's duty to pay social insurance (PRSI)

Introduction

Most employed people over 16 years of age make social insurance contributions. The amount you pay is based on your earnings and the type of work you do. For this reason it is called Pay Related Social Insurance (PRSI).

In fact, the law makes your employer responsible for PRSI, though you may have to pay an employee's share. The amount of PRSI paid by you and your employer depends on your social insurance class. Your social insurance class is in turn determined by your earnings and the type of work you do. You can find more information in our document on social insurance classes.

Your employer deducts your PRSI contribution directly from your wages. It is then collected by the Revenue Commissioners and a record of your contributions is kept by both your employer and the Department of Social Protection. Under the Payment of Wages Act 1991, you must be given a pay slip when you are paid. The PRSI deducted should be noted on your pay slip.

Your employer also pays PRSI contributions for you. This money (contribution) is not deducted from your pay. It is your employer's contribution to the National Social Insurance Fund. Again, this is collected by Revenue and a record of the contribution is kept by the Department of Social Protection. The Department publishes information for employers - Employers' guide to the Pay-Related Social Insurance (PRSI) contribution system - SW 3

Employees posted abroad

In some cases, PRSI contributions from employees who are insurable under Irish social security legislation but do not come within the PAYE system are collected by the Special Collection System operated by the Department of Social Protection.

EU Regulations and Bilateral Social Security Agreements allow posted workers, who are sent by their employer on short work assignments from Ireland to the other country, to remain subject to Irish PRSI instead of transferring to the social security system of the other country. For example, if you are employed in Ireland and your employer sends you to work temporarily abroad in another EU state you will remain subject to the Irish PRSI system and will continue to pay PRSI for 24 months (was 12 months). Your employer must complete an A1 form (formerly E101) certificate (available from the PRSI Special Collection Unit) for inspection by the social security authorities in the member state where you are sent to work. More information is available on the Special Collection System (SW 63).

If an employer sends you to work temporarily in a country not covered by EU Regulations or to a country with which Ireland does not have a Bilateral Social Security Agreement, you remain liable for Irish PRSI contributions for up to 12 months. If the employment exceeds 12 months, it may be possible to remain liable for Irish PRSI for longer than 12 months. Employees working abroad who are not subject to the Irish PRSI system may opt to pay voluntary contributions.

Rules

Your employer needs your Personal Public Service Number (PPSN) to make social insurance contributions for you. If your employer does not make the correct PRSI contribution, your employer will be held responsible for the cost of the entire contribution and any arrears that may be due. Failure to meet this responsibility can mean that PRSI which has not been paid can be recovered in court as a debt to the State.

If your employer does not make PRSI contributions on your behalf they may be required to repay to the Department certain social welfare payments you may have received illegally while working for them. Your employer may also be liable for any benefit you have lost as a result of them not paying PRSI contributions on your behalf or for repayment of social welfare assistance paid to you in lieu of lost benefit.

PRSI inspections

Every year, inspectors from the Department of Social Protection visit many employers. The purpose of inspections is to find employers that:

  • Do not pay any PRSI contributions for their employees
  • Do not keep proper records for them
  • Encourage employees to claim jobseeker payments
  • Understate wages being paid to employees

The Department's inspectors have power to inspect records and there are penalties for people who obstruct or refuse to supply information, or fail to keep or produce records and documents.

PRSI exemption

In some cases, employers do not have to pay their share of PRSI for employees. However, employees must still pay their share of PRSI unless they are a worker posted to Ireland (see below).

From 1 January 2014 the lower rate of employer PRSI is 8.5% for all jobs that pay up to €356 per week. (The rate was halved to 4.25% from 1 July 2011 and was restored to 8.5% from 1 January 2014.)

Employer Job (PRSI) Incentive Scheme

The Employer Job (PRSI) Incentive Scheme was open to employers who create new and additional jobs. Under this scheme, employers did not have to pay the employers' portion of the PRSI contribution for certain employees for 18 months. It is no longer in operation from 1 July 2013. Find out more about the Employer Job (PRSI) Incentive Scheme.

Workers posted to Ireland

A worker who is ordinarily resident in a country not covered by EU Regulations, or with which Ireland does not have a Bilateral Social Security Agreement and who is sent to work temporarily in Ireland by an employer who is not ordinarily registered in Ireland nor has their principal place of business in Ireland, Northern Ireland, Great Britain or the Isle of Man, may be exempt from paying Irish PRSI contributions for up to 12 months.

Paying PRSI contributions during illness

If your employer pays you when you are ill, you will continue to pay PRSI. Some employers will continue to pay you when you are out of work due to illness as long as you hand over to your employer any Illness Benefit payment you get from the Department of Social Protection. In this case, your employer only pays a PRSI contribution on the amount of sick pay minus the amount of Illness Benefit.

If your employer pays you when you are ill and allows you to keep your Illness Benefit payment, your employer's PRSI contribution is paid on the full amount of the sick pay, ignoring the Illness Benefit payment.

If your employer does not pay you when you are absent from work through illness, no PRSI contributions are due.

From 2012 Illness Benefit is taxable. However any payments for dependent children are not taxable. You can get more information in Revenue's PAYE Notice To Employers and in Revenue's guide IT50, both of which are available on the Revenue Commissioner's website. (Before 2012 the first six weeks of Illlness Benefit were not taxable.)

Employing family members and PRSI

Most employees are liable to pay PRSI. Exceptions to this general rule apply in the case of certain family employment. This term is used to describe a situation in which a self-employed sole trader either employs, or is assisted in the running of the business by a spouse, civil partner or other family member(s). If the business does not operate on a sole trader basis - for example if it is a Limited Company or a Partnership - it is not family employment.

The following categories of family employment are insurable under the social insurance system in exactly the same way as employments that have no family connection:

If you are employed as an employee by a prescribed relative and the employment is not related to a private dwelling house or a farm in or on which both you and the employer reside (PRSI Class A or Class J applies). If you are employed as an Apprentice by a prescribed relative (even if the apprenticeship employment does relate to a private dwelling house or a farm in or on which both you and the employer resides) there must be a registered Contract of Apprenticeship involved (PRSI Class A or Class J applies).

A prescribed relative is a parent, grandparent, stepparent, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother, or half-sister.

The following categories of family employment are the exceptions that are not covered by the social insurance system:

  • If you are employed as an employee by your spouse or civil partner
  • If you are employed as an employee by a prescribed relative and the family employment relates to a private dwelling house or a farm in or on which both you and the employer reside
  • If you assist or participate in the running of the family business but not as an employee. (For example, a son/daughter who is attending full-time education who participates in the business (e.g. farm) after school hours or a spouse/civil partner who carries out book-keeping work for the business - but is not an employee.)

Points to note:
PRSI Class M is used to record situations in which there is no liability to social insurance.

Subject to certain conditions, if you cease to be covered by compulsory PRSI you may opt to become insured on a voluntary basis and pay voluntary contributions.

More information can be found on Family Employments & PRSI (SW 102).

Rates

The amount of PRSI both you and your employer pay will depend on your earnings and the social insurance class you are insured under. Here is an example for a Class A employee in 2014:

If you are earning less than €352 gross per week (before tax is deducted), you will not pay any social insurance. This does not mean that you are not getting a contribution. You are still covered by Class A social insurance. Your employer is paying social insurance on your behalf. Your employer will pay a contribution of 8.5% on your earnings.

If you earn over €352 per week, you will pay 4% PRSI on all your earnings. Your employer pays 8.5% on your earnings up to €356. Your employer pays 10.75% on your earnings over €356.

More information can be found about the amount of PRSI paid in each Class.

How to apply

Your employer deducts your PRSI contribution from your wages. As an employee who pays PRSI contributions, you are entitled by law to inspect the PRSI record kept by your employer about you. You can also get a statement of your record from your employer every three months.

You can also contact the Records Section in the Department of Social Protection to check your PRSI record.

Where to apply

PRSI Records

Department of Social Protection
McCarter's Road
Ardaravan
Buncrana
Donegal
Ireland

Tel:(01) 471 5898
Locall:1890 690 690
Homepage: http://www.welfare.ie/

PRSI Special Collection Section

Department of Social Protection
Social Welfare Services Office
Cork Road
Waterford
Waterford
Ireland

Tel:(01) 471 5898 or (051) 356 010


Page updated: 14 February 2014

Language

Gaeilge

Related Documents

  • Social insurance classes
    The social welfare benefits you can get is determined by the PRSI Class you are in. This document helps you find out your class of social insurance and the weekly amount of social insurance you must pay.
  • 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.
  • Social insurance in Ireland
    Social insurance contributions entitle you to a range of benefits that are administered by the Department of Social Protection.

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.