As part of the payroll training courses that we offer, I am often asked for a quick summary of what the income levy is all about so here goes!!. The information below refers to the 2010 payroll calculations. The training courses we offer in this area cover both manual and computerised (Sage Quickpay) skills.
Income Levy Calculation
The levy is calculated based on the following bands of gross pay.
· Income up to €75,036 per annum - 2% levy
· Income between €75,037 and €174,980 per annum – 4% levy
· Income in excess of €174,980 per annum – 6% levy
Full medical card holders are exempt from the Income Levy as well as individuals aged 65 or over whose annual income does not exceed €20,000 per annum(p.a.).
Where the income exceeds the weekly minimum threshold of €289 the full income is subject to the income levy. Where the income levy has been applied for particular pay period(s) throughout the year but the minimum threshold of €15,028 p.a. has not been exceeded at week 52 then no liability to the income levy arises. In this situation and provided you were in continuous employment with an employer throughout the year in question (for the full 52 weeks) your employer should make an adjustment at week 52 and refund all income levy deducted. Where you have not been in continuous employment with an employer throughout the year in question Revenue, rather than the employer, will deal with any refund of income levy due.
The Income Levy is always calculated on a Week 1 / Month 1 Basis.
The income Levy is always calculated on Gross Pay. If you are paying pensions or A.V.C’s which are tax allowable for the purposes of calculating income tax, the income levy is still calculated on the gross pay before any pension or A.V.C. deductions.
Income Levy and Tax Return Forms
· The income levy amount is included with the PAYE figure on the P30 return.
· The income levy is also included with the PAYE figure on the P35 form.
· At the end of the year, every employee still on the payroll requires both a P60 as well as end of year Income Levy Certificate. Employees who have left do NOT get either a P60 or an end of year Income Levy Certificate.
· As employees leave, an Income levy cessation form as well as a P45 form is required to be completed by the employer.
The breakdown of the income levy threshold figures are as follows:
|
Annual Threshold |
Weekly |
Fortnightly |
Monthly |
4-Weekly |
Bi-monthly |
Quarterly |
| 15,028 |
289 |
578 |
1,253 |
1,156 |
627 |
3,757 |
|
75,036 |
1,443 |
2,886 |
6,253 |
5,772 |
3,127 |
18,759 |
|
174,980 |
3,365 |
6,730 |
14,582 |
13,460 |
7,291 |
43,745 |
|
Over 65’s |
||||||
|
20,000 |
385 |
770 |
1,667 |
1,539 |
834 |
5,000 |