Whenever an individual pays Pay As You Earn (PAYE), Pay Related Social Insurance (PRSI) or the Universal Social Charge (USC), there arises the possibility of a payroll (PAYE, PRSI, USC and/or Local Property Tax) refund. This could come from the payroll system itself, or from the respective government entity (Revenue or Social Welfare). In order to understand tax refunds, it is important that you understand where the money has gone.
When an individual is paid by their employer, the employer is bound by law to apply three separate charges:
- Tax also known as Pay As You Earn (PAYE)
- Pay Related Social Insurance (PRSI), prior to 2012 this charge also included the Health Levy (also referred to as Health Contributions).
- Universal Social Charge (USC)
- Local Property Tax (LPT), if an employee has chosen to pay their LPT through the payroll or if Revenue have requested the employer to collect the LPT through the payroll.
While the three charges are always applied, based on an individual’s circumstances, they may not necessarily result in money being deducted, as the liability could simply be €0. However, where the liability is greater the €0, the individuals salary will be deducted by the relevant amount.
Payslips and Payroll Systems can vary a lot from one employer to the next. There is a wide range of different options an employer can take when dealing with the payroll. However, no matter what payroll system an employer uses, ultimately the end result should be the same. An employee gets paid a salary, and from that salary typically there will PAYE, PRSI and USC values deducted.
For PAYE and USC refunds, Revenue can process refunds via the PAYE Anytime. An overview of the system is available on the Revenue website here
For Social Welfare (PRSI), an application must be submitted in writing. Details are available here
Please contact us should you require any assistance with your tax refunds.