Tax and starting work

Introduction

Most employees pay tax through the PAYE (Pay As You Earn) system. This means that your employer deducts the tax you owe directly from your wages, and pays this tax directly to Revenue.

You will also pay PRSI and the Universal Social Charge on your income.

If you are starting to work for yourself, there are different tax rules for self-employed people.

Starting work

It is important to make sure that your tax is dealt with properly from the start and that your new employer deducts the right amount of tax from your pay.

You should tell Revenue as soon as possible after you accept a job offer, or you may have to pay emergency tax (see more below). You should do this even if it is a part-time or temporary job.

Revenue will send a Revenue payroll notification (RPN) to your new employer. The RPN will tell your employer how much income tax and universal Social Charge (USC) to deduct from your pay.

Take the following steps as soon as possible so that your employer receives an RPN before your first day:

  1. Give your employer your Personal Public Service Number (PPS number). Your employer will notify Revenue of your start date. This will create a new employment record for you and let your new employer access up-to-date tax credits and tax rate bands for you. Find out more about how to get a PPS number in 'How to register your new job' below.
  2. Register the details of your new job with Revenue’s Jobs and Pensions online service in myAccount – see 'How to register your new job' below.

Tax credits

Tax credits reduce the amount of income tax that you have to pay. Your gross tax is calculated depending on your income. Tax credits are then deducted from the gross tax to give the amount of tax that you have to pay.

Tax credits are made up of various credits and reliefs which you may be able to claim, depending on your circumstances. Everyone can claim a personal tax credit for example, and you can also claim relief for items such as the Single Person Child Carer Credit.

When you have registered the details of your new job, Revenue will send your employer a tax credit certificate showing the tax credits that your employer deducts from your tax bill. You can view your tax credit certificate and claim any additional tax credits you may be due through the PAYE Services section in your myAccount Service.

Details of all the main tax allowances and reliefs are available from Revenue.

What do I have to pay tax on?

Tax is payable on earnings of all kinds that result from your employment. This includes for example, bonuses, overtime, non-cash pay or benefit-in-kind (such as the use of company car or tips).

Pay that you receive through working extra hours (overtime) or bonuses, is included as part of your taxable pay for that week or month. You do not get any additional tax-free allowances against these additional earnings.

You do not pay tax on:

  • Scholarship income
  • Interest from savings certificates, savings bonds and national instalment savings schemes
  • Payments to approved pension schemes.

How to avoid emergency tax

You may be taxed on a temporary basis called emergency tax if you are changing job or starting work for the first time and your new employer does not get your RPN.

If you give your employer your PPSN

You get a tax cut-off point for the first month, based on the single person tax cut-off point for the year.

Your income is taxed at the standard rate until week 4 and at the higher rate from week 5 on.

If you don’t give your employer your PPSN

You are taxed at the higher rate of tax with no tax credits, until you give your employer your PPSN.

You can check Revenue’s current emergency tax and USC rates (pdf).

Avoid paying emergency tax

To avoid paying emergency tax you should:

Income tax bands

Income tax bands will determine the rate of tax you pay on your income or salary. You can find your rate band for the current year on Revenue’s website.

Read more about how your tax is calculated here.

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.

You must give your new employer of your Personal Public Service Number (PPS number) as this will make sure that your combined social welfare contributions are recorded and that your entitlement to benefits is protected for the future. You can find more information about social insurance (PRSI).

Starting a second job

If you take on a second job, you can allocate your tax credits and rate band between your employers. Each employer will then receive a Revenue Payroll Notification which instructs them on the correct deductions to make for you. See Revenue's information on what to do if you get a second job.

How to register your new job

Where your new employer does not notify Revenue that you have started, you can use myAccount to register your new job.

To register the details of your new job with Revenue you first register for myAccount.

Once you have received your password for myAccount, go to PAYE Services and select ‘Update Job or Pension Details’.

To add a new job or pension you will need:

  1. Your new employer's tax registration number
  2. The date your job starts and how often you will be paid
  3. To tell Revenue an estimate of your overall income

If you have recently moved to Ireland, you will need to provide some additional details such as arrival date.

For more information and support, see the Revenue myAccount help guides.

If you are unable to use online services, you can contact your tax office for help.

Further information about how to apply for a Personal Public Service Number (PPS Number) is available here.

You can read more about tax and starting work on the Revenue website.

Page edited: 7 July 2021