Flat rate expense: this relates to the type of job you have. You can google who this is applicable to.
The next two are your tax credits: they are given to everyone.
Paye underpayment/overpayment: this is to do with how much tax you paid/underpaid. An underpayment will be taken out of your tax credits over time, so that you don’t experience hardship. If it is an overpayment, they send you money back. With an underpayment, make sure you claim all your medical expenses as it can reduce the amount owed.
These tax credits are split over 12 months to reduce your tax liability. They come off your gross pay and your net is with the tax credits and tax applied to your pay.
Hope that helps somewhat.
So you be paying 20% or 40% PAYE (Pay as you earn) income tax on all your earningss depending on your income levels.
What you see above are essentially adjustments to your tax bill which you are entitled to in the case of your tax credits, or liable to pay back in regards to your underpayment.
Your two €1700 tax credits are standard credits given to citizens who are employed by an Irish employer. These are divided and applied by your payroll department to reduce the tax you pay weekly/monthly. You can claim a plethora of other tax credits to reduce your tax bill depending on your circumstance eg. There is a new rental tax credit worth €500 for people in private rental situations. You can also claim 20% of any medical expenses you pay in the form of a tax credit. These tax credits are claimed on your Tax return which should be submitted anually on your revenue.ie My account.
Underpayments can be caused by a multitude of things such as payroll error. I was hit with a small underpayment as I had tax owed from claiming the enhanced illness benefit during covid which was a tax liable payment.
If you genuinely don’t know what you’re doing, be careful claiming things like flat rate expenses; there are a lot of rules around eligibility for credits like those, and you want to be certain you’re actually eligible for the credit you’re claiming.
3 comments
Flat rate expense: this relates to the type of job you have. You can google who this is applicable to.
The next two are your tax credits: they are given to everyone.
Paye underpayment/overpayment: this is to do with how much tax you paid/underpaid. An underpayment will be taken out of your tax credits over time, so that you don’t experience hardship. If it is an overpayment, they send you money back. With an underpayment, make sure you claim all your medical expenses as it can reduce the amount owed.
These tax credits are split over 12 months to reduce your tax liability. They come off your gross pay and your net is with the tax credits and tax applied to your pay.
Hope that helps somewhat.
So you be paying 20% or 40% PAYE (Pay as you earn) income tax on all your earningss depending on your income levels.
What you see above are essentially adjustments to your tax bill which you are entitled to in the case of your tax credits, or liable to pay back in regards to your underpayment.
Your two €1700 tax credits are standard credits given to citizens who are employed by an Irish employer. These are divided and applied by your payroll department to reduce the tax you pay weekly/monthly. You can claim a plethora of other tax credits to reduce your tax bill depending on your circumstance eg. There is a new rental tax credit worth €500 for people in private rental situations. You can also claim 20% of any medical expenses you pay in the form of a tax credit. These tax credits are claimed on your Tax return which should be submitted anually on your revenue.ie My account.
Underpayments can be caused by a multitude of things such as payroll error. I was hit with a small underpayment as I had tax owed from claiming the enhanced illness benefit during covid which was a tax liable payment.
If you genuinely don’t know what you’re doing, be careful claiming things like flat rate expenses; there are a lot of rules around eligibility for credits like those, and you want to be certain you’re actually eligible for the credit you’re claiming.