PRSI and Family Employment
From Department of Social Protection
Published on
Last updated on
From Department of Social Protection
Published on
Last updated on
With very few exceptions, all people aged 16 or over and under pensionable age or in the case of a person born on or after 1 January 1958 who is aged between 66 and 70 years and has not been awarded the State Pension (Contributory), must pay PRSI if they are:
In return, they are covered for a range of Social Insurance benefits and provisions see Benefits Covered under the main PRSI Classes.
Exceptions to this general rule apply in the case of certain 'Family Employment'. This term is used to describe a situation in which a self-employed sole trader/businessperson either employs, or is assisted in the running of the business, by a spouse/civil partner or by other family member(s). (Employment by a Limited Company or a business partnership is not "Family Employment" because the employment relationship is with the Limited Company or the business partnership, rather than the individual family member(s).
The following categories of 'Family Employment' are insurable under the Social Insurance system in exactly the same way as employments that have no family connection:
* A 'Prescribed relative', as laid down in legislation, is a parent, grandparent, stepparent, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother, or half-sister.
The following categories of 'Family Employment' are the exceptions that are not covered by the Social Insurance system:
NOTE
For more information on Voluntary Contributions see: Operational Guidelines: PRSI - PRSI Voluntary Contributions
Employed as an Employee, means that you are employed in the family business under the same terms and conditions as a worker who is not a relative. You would, for example, be subject to control, direction and dismissal by the employer, receive a salary and holiday pay and have no control over the running of the business.
If the business is a Limited Company or Partnership, it is a separate legal entity. Employment in such a business is not 'Family Employment'. This is because the employment relationship is with the Limited Company or Partnership rather than the individual family member who owns or runs it.
If you work for a Limited Company that is owned by a spouse/civil partner or a family member, the PRSI you pay is determined by the circumstances of your employment.
From 1 July 2013 proprietary directors who own or control 50% or more of the shareholding of a company, either directly or indirectly e.g., through a holding company, are classified as self-employed and liable to pay PRSI at Class S. The classification of proprietary directors who own or control less than 50% of the shareholding of the company will continue to be determined on a case-by-case basis, taking into consideration the "Code of Practice on determining Employment Status". Code of Practice on Determining Employment Status can be found here.
The key question is whether or not you are employed as an employee. The factors that are considered in deciding this matter are quite complex.
A limited company is a separate legal entity.
Two or more family members who operate a business as a Partnership and share the profits may be insurable as self-employed contributors at PRSI Class S, provided each has a reckonable income of at least €5,000 a year from all reckonable sources.
The following points should be noted:
Note: PRSI contributions are calculated on the basis of income details contained in Income Tax returns.
If you are unsure of your social insurance position, you may write to and request a formal decision from:
This process involves, firstly an investigation into the terms and conditions of the employment, which is followed by a formal decision made by a Deciding Officer under Social Welfare legislation.
If you are dissatisfied with the decision made by a Deciding Officer, there is a right of appeal (within 21 days) to:
If you are uncertain about any part of this guide or require further information, please contact:
Your local Intreo Centre or Social Welfare Branch Office and your local Citizens Information Centre are available to help with general enquiries.