In a recent Cpl survey over 72% of respondents confessed to having being emergency taxed – that’s a lot of extra tax. It can be difficult to understand the many different rules of your tax, especially when starting a new job. If you’re waiting for your first paycheck in a new role and you’re struggling to grasp the basics of Emergency Tax we’ve collected all the information you need to avoid being charged extra tax on an emergency basis.
In Ireland, according to the Revenue your employer is legally required to charge emergency tax in certain situations. Emergency tax policies can get complicated, so to help ensure you don’t get charged emergency tax on your income we’ve gathered all the necessary Emergency Tax information for workers in Ireland.
Emergency tax is the taxation of all your earnings at the higher rate of tax for a temporary period and will leave you receiving a lower wage than normal, which can be frustrating if you are stuck for cash!
When is Emergency Tax applied?
Emergency tax is applied when you don’t register a new job with the Tax Revenue Commission. This happens if your employer hasn’t received either a:
- Certificate of tax credits from the tax office or,
- Form P45 (parts 2 and 3) from you, in respect of your previous employment
- Or you have given your employer a P45 without a PPS Number
In each case you will be given a temporary tax credit for the first month of employment but tax deductions are increased progressively from the second month onwards. The effect of emergency basis is that after 4 weeks no tax credits are given, and tax is paid at the higher rate from week 9, regardless of the level of pay.
The emergency rate of USC (Universal Social Charge) will also be applied to your earnings at a rate of 8%. It makes sense therefore to avoid the emergency basis by following the simple steps outlined below.
How to register your employment with the Revenue
Option 1: If you never registered with the Revenue in Ireland:
If you have never worked in Ireland or registered with the Revenue for tax credits before you must register, even if you are only starting a part-time or temporary job. Registering online here is the only option.
When you start your first job, you should tell Revenue as early as possible, or you’ll end up paying emergency tax. After registering, the Revenue will send a Tax Credit Certificate to your new employer so that the employer knows how much Income Tax (IT) and Universal Social Charge (USC) to deduct from your pay. Visit the Revenue website for more information on what you must do when starting your first job.
Option 2 – Changing Jobs
If you change jobs, you should get a P45 Form from your old employer and give it to your new employer. This will make sure you pay the correct amount of tax and you will not be charged emergency tax. Ask the Finance team at your new job or visit the Revenue Website for more information on what you should do when you are changing jobs.
Option 3 – Second or Multiple Jobs
If you work in two (or more) jobs at the same time, you must let the Revenue know as soon as you start another job so they can send your tax credit certificate for that job. Otherwise, your new employer may deduct the wrong amount of tax and you may be put on emergency tax.
How to get Emergency Tax back
Thankfully, getting an emergency tax refund is pretty simple. All you have to do is register your employment with the Revenue. The revenue will then send a cumulative Tax Credit Certificate to your employer, the employer will refund any tax and Universal Social Charge (USC) that you have overpaid on your next pay day. If you leave your job before getting the refund, you can also claim a tax refund directly from the Revenue.
Many people don’t put their taxes at the front of their mind when changing job or starting a new one! If you want to receive your full income, it’s not something you should ignore.