Pay-Related Social Insurance (PRSI) contributions are collected by Revenue on behalf of the Department of Employment Affairs and Social Protection (DEASP) and used by the Social Insurance Fund to help pay pensions and Social Welfare benefits. Most employees and their employers are required to pay PRSI; however, certain exclusions do apply. A detailed explanation of the various aspects of PRSI can be found on the government’s website here.
PRSI contributions are calculated on an employee’s gross income, known as their reckonable earnings. The contribution rates for employees and employers are determined by the employee’s PRSI class; the different classes and their applicable contribution rates can be found here.
SimplePay currently supports four of the 11 classes, namely: A, S, J and M. The system divides PRSI class A into two groups: A (Normal) for sub-classes AO, AX, AL and A1, and A (Community Employment) for sub-classes A8 and A9.
The PRSI class for an employee can be configured on each employee’s Basic Info screen. It is, therefore, important that your employees are correctly set up on the system.
From the 2016 tax year, a PRSI credit was introduced for class A. This credit reduces an employee’s PRSI liability and is determined by the employee’s gross earnings, decreasing incrementally as the gross earnings increase. The calculation and application of this credit are discussed in the 2020 contribution guide.
Employers must report PRSI income and contributions each pay period as part of their electronic submissions to Revenue. These submissions must be done for each pay period on or before the date on which employees receive payment. More information on the submission process can be found in this article:
PRSI Exempt vs PRSI Class M
There is a difference between employees who are PRSI Exempt and employees who do not contribute PRSI as they are in PRSI Class M. Do not mark an employee as PRSI Exempt if they have been assigned a PRSI class. An employee cannot belong to a PRSI class and also be PRSI Exempt.
The following employees could be PRSI exempt:
- persons issued with an E101 Certificate / A1 Portable Document as migrant workers within the EU or non-EU nationals on temporary assignment to Ireland
- persons issued with a Certificate of Coverage from a country with which Ireland has a bi-lateral Social Security Agreement on temporary assignment to Ireland
- persons issued with a PRSI Exemption Certificate from Special Collections Section
The following employees are usually classified as belonging to PRSI Class M:
- employees under age 16
- people aged 66 or over (including those previously liable for Class S)
- persons in receipt of occupational pensions or lump-sum termination payments
Indicate the class or PRSI exemption of an employee under Basic Info. For more information about completing an employee’s Basic Info, refer to the following article: