Pay-Related Social Insurance (PRSI) contributions are collected by Revenue on behalf of the Department of Social Protection (DSP) and used by the Social Insurance Fund to help pay pensions and Social Welfare benefits. Most employees and their employers are required to pay PRSI; however, certain exclusions do apply. A detailed explanation of the various aspects of PRSI can be found on the DSP’s website.
Calculating PRSI
PRSI contributions are calculated on an employee’s gross income, known as their reckonable earnings. The contribution rates for employees and employers are determined by the employee’s PRSI class; the applicable rates for a particular class can also be found on the DSP’s website. There are 11 PRSI classes and the applicability of each of these is described on the DSP’s website.
SimplePay currently supports four of the 11 classes, namely: A, S, J and M, and this can be configured on each employee’s Basic Info screen. It is, therefore, important that your employees are correctly set up on the system.
From the 2016 tax year, a PRSI credit was introduced for class A. This credit reduces an employee’s PRSI liability and is determined by the employee’s gross earnings, decreasing incrementally as the gross earnings increase. The calculation and application of this credit are discussed on this page.
Reporting PRSI
The total monthly PRSI liability (employee + employer) is reported on the monthly (quarterly) P30, along with the PAYE and USC liabilities. These amounts are all paid over to Revenue, who collects PRSI on behalf of the DSP.
An employee may have multiple PRSI classes in a tax year and the total contributions and number of contribution weeks for each class must be reported annually on each employee’s P60 and the company’s P35. This information is also included on the P45 of any employee who leaves employment during the tax year.
PRSI Exempt vs PRSI Class M
Employees are classified into various classes for PRSI purposes. Details about the various classes can be found on the DSP’s website.
There is a difference between employees who are PRSI Exempt and employees who do not contribute PRSI as they are in PRSI Class M. Do not mark an employee as PRSI Exempt if they have been assigned a PRSI class. An employee cannot belong to a PRSI class and also be PRSI Exempt.
The following employees could be PRSI exempt:
- persons issued with an E101 Certificate / A1 Portable Document as migrant workers within the EU or non-EU nationals on temporary assignment to Ireland
- persons issued with a Certificate of Coverage from a country with which Ireland has a bi-lateral Social Security Agreement on temporary assignment to Ireland
- persons issued with a PRSI Exemption Certificate from Special Collections Section
The following employees are usually classified as belonging to PRSI Class M:
- employees under age 16
- people aged 66 or over (including those previously liable for Class S)
- persons in receipt of occupational pensions or lump-sum termination payments
Indicate the class or PRSI exemption of an employee under Basic Info. For more information about completing an employee’s Basic Info, refer to the following article: