What Do All These Numbers on My Payslip Mean?

When you receive your payslip from your employer, it will contain certain information. Understanding what each piece of information means can help you manage your finances and ensure that you’re being paid correctly.

Here’s what you should expect to see on your payslip:

• Gross pay: This is the total amount of money you earned before any deductions were made. It includes your regular pay as well as any bonuses or overtime you may have received.
• Net pay: This is the amount of money you take home after all deductions have been made. It’s also known as your “take-home pay.”
• Deductions: Deductions are amounts that are taken out of your pay before you receive it. This can include taxes, social insurance contributions, and pension contributions. Deductions can also include other items, such as union dues or insurance premiums.
• Taxable pay: This is the portion of your gross pay that is subject to income tax. Some types of income, such as certain allowances and benefits, may be exempt from income tax.
• Non-taxable pay: This is the portion of your gross pay that is not subject to income tax. Examples of non-taxable pay include certain travel allowances, reimbursement of expenses, and some social welfare payments.
• PRSI (Pay-Related Social Insurance): This is a social insurance contribution that is deducted from your pay. It provides you with certain social welfare benefits, such as maternity or illness benefit.
• USC (Universal Social Charge): This is a tax that is deducted from your pay. It is based on your income and is used to fund public services.
• Pension contributions: If you’re a member of a pension scheme, you will see deductions on your payslip for your contributions to the scheme. Your employer may also make contributions on your behalf.
• Other deductions: This can include any other deductions that are made from your pay, such as loan repayments or court-ordered deductions.

If you have any questions about the information on your payslip, you should speak to your employer or contact a payroll professional. At Jefferson Payroll, we’re here to help you understand your payslip and manage your payroll needs.

Understanding Tax and PRSI on your payslip

Tax and PRSI are two of the most common deductions you’ll see on your payslip. While they may seem confusing, understanding how they are calculated ensures that you are receiving the right pay and that your deductions are correct.

In this section, we’ll explain how tax and PRSI are calculated and why it’s important to review your tax credits and tax bands.

Importance of Reviewing Tax Credits & Tax Bands

You can review and update your tax credits through Revenue’s online system, MyAccount. You should also notify Revenue if your circumstances change, such as if you start a new job or have a change in marital status which can change how you are assessed, e.g., jointly, that may provide a tax benefit.

Below you will find a table that lists the 2023 tax rates and the applicable bands:

Personal Circumstances	Tax Band and Rate
Single/widowed/surviving civil partner with no qualifying children	€40,000 at 20% balance at 40%
Single/widowed/surviving civil partner that qualifies for Single Person Child Carer Credit	€44,000 at 20% balance at 40%
Married or in a civil partnership with one income	€49,000 at 20% balance at 40%
Married/civil partnership with both spouses earning	€49,000 and up to €80,000 at 20% balance at 40% – Note: The cut-off point is raised by up to €31,000 or the income amount of the partner with lower earnings

Tax Bands

It is easier to understand how tax bands work by looking at an example. Let’s have a look at how the basic tax of a single person earning €50,000 would be calculated.

1. The first €40,000 of the individual’s earnings would be calculated at 20% – So, 20% of €40,000 = €8,000
2. The balance of €10,000 is liable to 40% tax, so 40% of €10,000 = €4,000
3. The total tax for a single person earning €50,000 is €12,000

However, this figure does not include any tax credit offset. Tax Credits are lower your liability and can play a massive part in determining the size of your tax bill.

Tax credits reduce the amount of tax an individual has to pay and are designed to ensure that everyone pays a fair amount based on their individual circumstances.

The table below lists some of the most common tax credits that can be used to reduce your tax liabilities and are annual values. If you are paid monthly divide by 12 periods, weekly by 52 periods, etc., to determine what you may see on your payslip.

Personal Circumstances	Tax Credit
Single person/widowed/surviving civil partner	€1,775
Married or in a civil partnership	€3550
Widowed individual or surviving civil partner in the first year of bereavement	€3,300
Widowed/surviving civil partner with dependent children	€1,650
Widowed/surviving civil partner without dependent children	€2,240
Single individual child-carer	€1,650
Home carer	€1,700

Tax Credits 2023

These are just some of the common forms of Tax Credits. Making sure that you have all the credits due to you (and aren’t claiming ones that aren’t) can be difficult, and if you have any doubts, it is always wise to seek professional assistance.

Whilst making sure you are claiming the right tax credits is difficult but essential, calculating how it affects your tax liability is easy.

Let’s look at our €50,000 earning individual again. We already know that their basic rate of tax will equate to €12,000. Let’s say that they are a single person and a child-carer.

This means that they are due the single person and the single individual child-carer tax credits. So, the amount of tax due is reduced by these amounts:

• €12,000 – (€1,775 + €1,650) = €8,575

Claiming the right tax credit entitlement is important both to avoid paying too much tax and to avoid repaying overclaimed tax reductions and even a potential fine.

How Is PRSI Calculated?

Another crucial part of understanding your payslip is Pay Related Social Insurance (PRSI). PRSI is a compulsory social insurance payment made by employees and employers in Ireland. Its purpose is to provide social insurance benefits, such as social welfare payments and pensions, to those who have made contributions through their PRSI payments.

There are different classes of PRSI, which determine the level of social insurance benefits that an individual is entitled to. Class A PRSI is paid by most employees and is the highest level of social insurance coverage. It entitles individuals to a range of benefits, including illness benefits, maternity benefits, and state pension (contributory).

Example of Class A PRSI Calculation

When calculating PRSI, the magic figure is €352 earnings per week. If you earn below this figure, then you won’t pay any PRSI. However, your employer will be paying PRSI on your behalf.

If you earn more than this, then you will be charged PRSI at 4% of your total earnings. The one proviso is the PRSI credit scheme that reduces the liability if you earn between €352.01 and €424.00 per week.

The maximum PRSI credit you can claim is €12.00. For someone earning the minimum threshold figure, this reduces the liability from €14.08 (4% of €352.01) to €2.08.

We can look at the €50,000 a year example again to see how Class A PRSI liability is typically calculated.

In this case, the full liability is due, so this equates to 4% – 4% of €50,000 = €2,000.

What to Do if You Have Questions or Concerns About Your Payslip

At Jefferson Payroll, we understand that reviewing your payslip can sometimes be confusing, and you may have questions or concerns about the information provided. If you have any issues or queries regarding your payslip, we encourage you to get in touch with the payroll contact in your company as soon as possible.

Our expert payroll team is available to assist them with any questions or concerns you may have. You can contact your payroll administrator via email or phone, and we’ll be happy to guide them through the information, explain any calculations or deductions, and answer any questions we can.

The Bottom Line

Understanding your payslip is crucial for ensuring that you receive accurate and timely payment, as well as understanding your tax and PRSI contributions. At Jefferson Payroll, we aim to provide our clients with clear and comprehensive payslips, but we understand that it can still be confusing. That’s why we encourage you to review your payslip carefully and get in touch with us if you have any concerns or questions.

Here are some final tips to help you review and understand your payslip in Ireland:

• Check that your personal details, such as your name and address, are correct.
• Make sure that your gross pay, net pay, and any deductions are accurate.
• Check that you have been given the correct tax credits and tax band.
• Review your PRSI contributions and ensure that you’re paying the correct class.
• Keep an eye out for any changes or discrepancies in your payslip, and contact us if you have any concerns.

By following these tips and reviewing your payslip carefully, you can ensure that you receive accurate and timely payments and understand your tax and PRSI contributions.

You should also check out our help video and step-by-step guide on how to read your payslip.