Details of Income Levy, Health Levy & PRSI Changes in Supplementary Budget 2009

Tax Rate Changes
In the short term the income tax rates remain unchanged, the standard rate being 20% and the higher rate is 41%.

Income Levy Doubled
In the Budget last December the Minister announced a new income levy which has applied since 1 January. However, the rates at which the income levy will apply going forward have been doubled and the relevant thresholds have been reduced. The exemption threshold for the income levy has also been reduced from €18,304 to €15,028. The revised rates and associated thresholds are shown below and the new rates will apply from 1 May 2009. If you exceed the income levy entry threshold of €289 weekly, the levy is applied to all of your earnings not just the amount in excess of the entry threshold.

• Income up to €75,036 (previously €100,100) the levy applies at 2%, previously at 1%.
• Income over €75,036 and up to €174,980 the levy applies at 4%, previously at 2%.
• Income over €174,980 (previously €250,120) the levy applies at a rate of 6%, previously 3%.

Health Contribution Levy Doubled
The Health Contribution Levy has also been doubled and the new 4% rate will apply on income up to €75,036. The higher rate levy of 5% (previously 2.5%) will apply to income over €75,036. These changes also take effect from 1 May 2009.The health Levy is calculated as part of the PRSI deduction. The health levy entry threshold remains unchanged at €500 weekly and €26,000 annually. If you earn under theses amounts, you are not liable to pay this levy and unlike the income levy, the levy is only applied to amounts in excess of the entry threshold.

Pay Related Social Insurance (PRSI)
There had been speculation for some time that the employee ceiling for full rate PRSI payers would be abolished. However, the last Budget introduced an increase in the annual ceiling from €50,700 to €52,000, with the contribution rate unchanged at 4% for employees (excluding the levies) and 10.75% for employers. However, the
Minister now raises the employee PRSI ceiling up to €75,036. This increased PRSI cost for employees will take effect from 1 May 2009.

Implications for Sage Payoll Customers
Relax!. The required changes will be available as a download in plenty of time for the May payroll processing for both Sage Quickpay and Sage Micropay solutions. In the meantime, keep an eye on the www.genesisbusinesscollege.net/blog site for further updates. For details of how Sage Payroll solutions can help eliminate your payroll headaches, checkout www.genesisbusinesscollege.net. There is no time like the present!