Operational Guidelines: PRSI for the Self-Employed
From Department of Social Protection
Last updated on
From Department of Social Protection
Last updated on
All self-employed persons aged between 16 and 66 years of age, with reckonable income or emoluments of €5,000 or more per year, are liable for compulsory insurance at Class S.
The vast majority of self-employed people will return their income to the Revenue Commissioners under the self assessment system. However, certain categories of self-employed will pay their PRSI through the PAYE system or directly to the Department of Employment Affairs and Social Protection.
The legislation dealing with the self-employed is:
An information leaflet, Guide to PRSI for the Self-Employed - SW 74 is also available at the below link.
A Guide to PRSI for the Self-Employed (SW74)
This guide is to help you understand the PRSI position of self-employed people.
PRSI for the self-employed is administered by:-
Persons classified as self-employed
PRSI Class S is paid by self-employed people such as:
Certain categories of persons are excluded from paying Class S. The legislation covering this is Part III of the First Schedule of the Social Welfare (Consolidation) Act, 2005.
The following are some examples:
** From 01/01/2014, a new charge of 4% PRSI will be levied on the self-employed income of these two categories. The contribution class will be ‘K’, attracting no benefit entitlements (Section 6, 2013 Social Welfare and Pensions (Miscellaneous Provisions) Act).
PRSI at Class S provides cover for:
Current legislation requires that all Class S contributions must be paid in full prior to the award of contributory pensions.
Rates of contribution
|Standard Rate||Class S contributions are payable at 4% of reckonable income - subject to a minimum annual payment of €500|
|Reduced rate||Persons whose annual income is €5,000 or more, who have been deemed to have no tax liability by the Revenue Commissioners and who are subsequently excused from making annual returns by the Inspector of Taxes, are required to pay a flat rate of €300 direct to this Department (see provisions for NNL cases, outlined in Section 7)|
When the full amount (100%) of income tax and PRSI charged has been paid, an annual compliment of 52 Class S contributions are awarded. Where less than the full amount due has been paid, no contributions are awarded.
Categories not covered by self-assessment
If a person is a self-employed company director their PRSI is deducted by the employer under the PAYE system. Although the PRSI of a company director is deducted by the employer it is the responsibility of each company director to ensure that the correct amount of PRSI has been deducted and remitted to the Revenue Commissioners.
No Net Liability (NNL) cases
A person who has been told by an Inspector of Taxes that they need not make a tax return, who has self-employed income of €5,000 or more per year, is liable to pay a flat rate self-employed PRSI contribution to this Department.
Examples of reckonable income
Reckonable income includes income from the following sources:
What is excluded from reckonable income
The following types of income are excluded from reckonable income and do not have to be taken into account when calculating the PRSI contribution:
Scheme for share fishermen
A share fisherman, or woman, who is classed as self-employed, may choose to pay an additional PRSI contribution at Class P. This contribution provides cover beyond normal Class S PRSI benefits, as follows:
The rate of Class P contribution is 4% of income, subject to the income ceiling applied to self employed contributors. This contribution is additional to the normal Class S payment made by the contributor. In order to remain a Class P contributor a person must continue to be liable for Class S PRSI and ensure that all payments due are up to date.
A person, other than a company director, who becomes self-employed must register with the Revenue Commissioners. They should contact their local tax office which will register them under the self assessment system for tax, USC and PRSI.
Where there is doubt with regard to a person's insurability status the case should be referred to Scope Section (01) 704 3000 of this Department for formal determination.
A refund of PRSI is payable to a self-employed contributor who reached age 56 years on or before 6 April 1988, paid PRSI for the first time on or after that date and does not qualify for either a State Pension (contributory) or State Pension (non contributory). The refund payable is 53% of PRSI paid, which is the pension element of Class S PRSI contributions.
These refunds are administered by Client Eligibility Services, LoCall 0818 690690.
The provisions of Section 35 of Chapter 2, Part II of the Social Welfare Consolidation Act 2005 and Chapter 2 of Part III of the Social Welfare (Consolidation Contributions and Insurability) Regulations, 1996 and Statutory Instrument 291 of 1997 apply.
It should be remembered that these refunds are repayable to the Department if the recipient subsequently becomes eligible for either a future State Pension contributory or State Pension non contributory payment.
Self employed persons who are not liable to pay PRSI in any year may, subject to meeting certain conditions, may be eligible to become a voluntary contributor. See voluntary contributions for full details. Information leaflet SW 8 also refers
SW8: Voluntary Contributions
Voluntary contributions allow you to remain insured once you leave the compulsory PRSI system. You may choose to pay voluntary contributions, provided you meet certain conditions.
Where to get more information
For more information on PRSI for the self-employed, contact your local Intreo Centre, you local Branch Office or Client Eligibility Services at:
See also information booklet SW 74