Glossary of Payroll Terms
BIK – Benefit In Kind – a benefit from an employer in a form other than a monetary payment (e.g. car, health insurance payment, hampers, etc.) Since January 2004, BIK’s are subject to PAYE and PRSI, by both employee and employer. The employer is obliged to quantify the value of a BIK and subject it to PAYE and PRSI through the Payroll system.
Form 12A – When an employee commences employment for the first time, they should complete Form 12A to apply for a Certificate of Tax Credits and Standard Rate Cut Off Point. www.revenue.ie/forms/form12a.pdf
Form P2 – Notice of Determination of Tax Credits and Standard Rate Cut-Off Point.
Form P2C – Certificate of Tax Credits and Standard Rate Cut-Off Point.
Form P2N – Allocation of Tax Credits and Standard Rate Cut-Off Point.
Form TRS 1 – Tax Relief at Source – Tax Relief on mortgage interest may be claimed by completing a form TRS1. The relief will then be granted by the Mortgage provider through reduced mortgage payments. Similarly, relief may be granted by providers of Medical Insurance at source for medical insurance premiums paid by individuals in respect of themselves, their spouse, children and dependant relatives. www.revenue.ie/forms/trs1.pdf
Health Levy – The Health Contribution Levy is administered by the Department of Health and Children. This levy is deducted through the payroll from employees aged 16 – 69 and is only payable by those under PRSI subclass 1 i.e. A1, J1, S1 etc.
Med 1 – This form can be completed by an individual to claim tax relief at the higher rate of tax in respect of health expenses incurred. www.revenue.ie/forms/med1.pdf
Med 2 – Tax relief can be claimed for dental expenses by completing a Form Med 2. www.revenue.ie/forms/med2.pdf
Notional Pay – the term used to describe the value of a BIK (Benefit In Kind), which is subject to PAYE and PRSI.
P9/P11/TDC – Tax Deduction Card – issued by Revenue to employers to assist them in manually calculating the amount of PAYE payable in each period by an employee.
P21 – Balancing Statement – an employee can request a statement of earning and tax for the year from Revenue.
P30 – Monthly or Quarterly Return of PAYE and PRSI by Employer to the Collector General due by the 14th of the month following the deduction from employees.
P35 – Annual End of Year Return containing details of earnings, tax paid, PRSI payments, PRSI class(es), number of contributions and total contributions in respect of each employee and the employer in the tax year.
P35L - a list of employees with details of PAYE and PRSI deductions and payments of each employee for the year.
P35LF – form completed with year end return providing information on pension contributions for Retirement Benefit Schemes, Personal Retirement Savings Accounts and Retirement Annuity Contracts.
P35L/T – form completed with year end return for employees for whom the employer does not have a PPS number.
P45 – a cessation certificate issued to an employee by the employer if he ceases employment, is granted a career break or dies while in employment.
P50 – If an employee has been unemployed for a period of at least 4 weeks he may claim a repayment of income tax from Revenue by completing a form P50. www.revenue.ie/forms/p50.pdf
P60 – an annual certificate issued to employees by their employers. Each employee employed on the 31st December is entitled to receive a form P60 by the 15th of February following the end of the income tax year detailing their earnings, tax deducted and PRSI deductions by employee and employer.
P333 – Notification of Employers PAYE Registration Number.
PAYE – Pay As You Earn – the tax payable on income earned as an employee. Employers are obliged to calculate and deduct PAYE due from the wages or salaries of their employees through the payroll system as they are paid.
PPS No. – Personal Public Service Number – issued by an individual’s local Social and Family Affairs Office. Since 1971 every individual born in Ireland is allocated a PPS number at birth.
PRC1 – form completed with year end return in respect of employees who had more than two PRSI classes during the tax year.
PRSI – Pay Related Social Insurance – another tax payable by both employer and employee administered by the Department of Social & Family Affairs. The rate of PRSI payable depends on the personal circumstances of the individual and the amount of earnings. PRSI deducted usually includes Health Levy deduction also.
Rent 1 – Tenants who pay landlords for private rented accommodation may be entitled to claim tax relief by completing a form Rent 1. www.revenue.ie/forms/rent1.pdf
ROS – Revenue On-Line System – a means to conduct transactions with the Revenue through the internet.
Schedule E Expenses – expenses that are wholly, exclusively and necessarily incurred in the performance of an employees duties. Tax Relief may be granted on Schedule E expenses.
SRCOP – Standard Rate Cut-Off Point - the amount of income that is liable to tax at the standard rate of 20%. Any income in excess of the SRCOP will be liable to tax at the higher rate, currently 41%.
Income levy – Introduced in 2009 and payable by everyone under the age of 65 who has gross annual income exceeding €15,028 or for those aged more than 65 who have a gross annual income exceeding €20,000.
Parking levy – although not yet introduced, the parking levy is a tax which may apply where an employee has an entitlement to use a parking space in an urban area for the parking of a car and where such space is provided directly or indirectly by the employer. It will only apply in specific designated urban areas in Dublin, Cork, Limerick, Waterford and Galway cities.