Avoiding Emergency Tax when you start a new job!

Avoiding Emergency Tax when you start a new job!

Congratulations if you’ve started a new job, but be sure to give you Personal Public Service Number (PPSN) to your new employer immediately when you start. Otherwise you will be deducted a high rate of emergency tax which could be as high as 40% and 8% Universal Social Charge.

When you give your PPSN to your new employer, they will notify Revenue on-line that you have started working with them and will be able to make the correct deductions from your salary. If there's a delay Emergency Tax will kick in.

From January 2019 a new system came into place that gives employers access to a Revenue Payroll Notification (NPN) for each employee so that they can immediately see what tax and USC they should deduct for the current year. The NPN ensures that they are using the correct credits and cut-off point for you.

If this is your first job in Ireland you must sign in to myAccount with Revenue.ie  to register your new job using the Jobs and Pensions service.

What happens if you get deducted too much tax (Emergency Tax)?

You should ensure that you have given your your PPSN to the right person and that the Accounts person or the Payroll Department have requested a Revenue Payroll Notification (RPN) on your behalf with Revenue.ie. If this is your first employment you will have to register with Revenue.ie as soon as possible - more information HERE.

If you are unfortunate to be deducted too much tax, don’t worry you will get it back as soon as an RPN is retrieved by your employer. In the next pay run the employer will refund any tax and Universal Social Charges that you have overpaid. You should get your Tax Refund really soon if you have provided all the necessary information to your employer.

According to Revenue.ie if you give your PPSN to your employer you will be taxed under normal rules where you are allowed a single person’s rate band for the first four weeks of employment. 

You will be taxed at the standard rate (20%) on income up to the limit of the rate band. Any income above that rate band will be at the higher rate on any income above this. 

After four weeks, your full income will be taxed at the higher rate (40%).

If you don't give your employer your PPSN or if the payroll person does not receive it on time, you will be taxed as if it were week 5 under 'normal emergency tax rules' as above. More information can be found about 'tax rules' on revenue.ie

Getting a Tax Refund

Your employer will process the refund of over paid tax as soon as they have your NPN. You will get the refund in your next salary / wages.

If it's just short term work or you leave your job before getting the refund and are unemployed, you can claim a tax refund directly from Revenue.ie. If you move to a new job before getting your refund your new employer will deal with the refund which will be issued to you in your salary.

More information on all the above can be found on www.revenue.ie

Best of Luck in your new job!