Tax Credit Certificates - P2C

  1. When are the employee's previous Total Pay, Tax and USC included on the tax credit certificate (P2C)?
  2. What pay, tax and USC details will be included on the P2C?
  3. Will subsequent amended P2Cs include previous pay, tax and USC details or will this pay, tax and USC information only be shown on the first P2C issued after a new employee commences?
  4. If an employee commences and ceases with the same employer a few times during the tax year, will the previous pay, tax and USC details on the P2C include amounts earned from this employer?
  5. As the P2C includes details of all previous pay, tax and USC for the year to date, how will an employer identify how much of this amount was already earned with this employer earlier in the tax year and how much refers to earnings with other employers?
  6. Can Revenue split the employee pay, tax and USC details between amounts previously earned by the employee with this employer and amounts earned by the employee with other employers?
  7. Does the employer have to use the employee pay, tax and USC details included on the P2C?
  8. What does the Exemption Case Indicator (Field 21) mean?
  9. What are the values for Field 21 - Exemption Case Indicator?
  10. Does the employer need to show the 40% Marginal Relief Tax Rate on the Form P45 or P60?
  11. What is a PAYE Exclusion Order?
  12. Who do I contact if I have another question?

1. When are the employee's previous Total Pay, Tax and USC included on the tax credit certificate (P2C)?

If an employee changes employment at any stage during the tax year, the details of previous pay, tax and USC (if available) will be shown on any P2C issued for this employee for the rest of the tax year.

If an employee changes employment at any stage during the tax year and the details of previous pay, tax and USC are not known or are not available (for whatever reason), a P2C will issue for that employee on a week1/month1 basis and previous pay, tax and USC figures will not be shown on the P2C.

The cumulative details of an employee's previous pay, tax and USC in the year will be shown on the P2C issued. If Revenue is advised of supplementary pay, tax and USC for an employee for the current year, the supplementary pay, tax and USC details will be added to the details already known and sent to the employer on the next P2C issued for that employee.

Back to Top

2. What pay, tax and USC details will be included on the P2C?

The P2C will include all the employee's pay, tax and USC details from 1 January up to the date of commencement of the new employment.

Example 1: If employee commences in Company A on 22 June 2016, the employee's previous pay, tax and USC for the period 1 January 2016 to 21 June 2016 (if any) will be included on the P2C issued to Company A in June 2016. If these pay, tax and USC details are not known, the P2C will issue on a week1/month1 basis.

Example 2: If the employee in Example 1 leaves Company A on 10 August 2016 and recommences in Company A on 15 October 2016, the pay, tax and USC details included on the P2C sent to Company A in October 2016 will include all details of the employees pay, tax and USC from 1 January 2016 to 14 October 2016.

Back to Top

3. Will subsequent amended P2Cs include previous pay, tax and USC details or will this pay, tax and USC information only be shown on the first P2C issued after a new employee commences?

All subsequent amended cumulative P2Cs will include details of the employee's previous pay, tax and USC.

The previous pay, tax and USC details will not be shown if a P2C is subsequently issued on a week1/month1 basis.

Back to Top

4. If an employee commences and ceases with the same employer a few times during the tax year, will the previous pay, tax and USC details on the P2C include amounts earned from this employer?

Yes. The employee pay, tax and USC figures on the P2C are the cumulative amounts from 1 January to the date of commencement of THIS period of employment.

Example 3: If an employee works for Company A from 1 January 2016 to 30 March 2016, then works for Company B for a few months and returns to Company A on 10 October 2016, the pay, tax and USC figures included on the P2C issued to Company A in October 2016 will include all pay, tax and USC from 1 January 2016 to 9 October 2016.

Back to Top

5. As the P2C includes details of all previous pay, tax and USC for the year to date, how will an employer identify how much of this amount was already earned with this employer earlier in the tax year and how much refers to earnings with other employers?

The PAYE system works on a cumulative basis - all earnings to date are taken into account when calculating an employee's PAYE.

The P2C will not give a breakdown of each employment or employer where the employee received the earnings or paid the tax or USC - it just shows the cumulative figure to date of commencement of THIS period of employment.

Each employer would know from his or her own records the amount of pay, tax and USC already paid to the employee during different periods of employment but they must use the cumulative pay, tax and USC from all employments to date when calculating PAYE liability.

Back to Top

6. Can Revenue split the employee pay, tax and USC details between amounts previously earned by the employee with this employer and amounts earned by the employee with other employers?

No - it is not possible to split the employee's previous pay, tax and USC details to show the amounts earned by the employee with each employer. The P2C will show just one figure for pay, one figure for tax, one figure for USC Pay and one figure for USC deducted. The previous pay, tax and USC details will be the total amount earned by the employee from 1 January to the date the employee commences in the new employment.

Back to Top

7. Does the employer have to use the employee pay, tax and USC details included on the P2C?

In most cases, the employer will use the pay, tax and USC figures from the P2C. These pay, tax and USC figures should not be different from figures obtained from (say) the most recent cumulative P45 as the source of the figures will, in most cases, be the same.

The employee's previous pay, tax and USC details are included on the P2C to assist the employer in calculating the correct PAYE due. The pay, tax and USC figures are the most up-to-date figures available to Revenue. If the pay, tax and USC figures are not available, the P2C will be on a week1/month1 basis.

If the employer is aware that the pay, tax and USC figures on the P2C are incorrect, this should be brought to the attention of the relevant Revenue District.

Back to Top

8. What does the Exemption Case Indicator (Field 21) mean?

A small number of employees/pensioners are entitled to Tax Exemption and Marginal Relief. This means that when their wages or pension exceeds a certain limit, they are taxed at 40% instead of the higher rate of tax. If the employee/pensioner is entitled to Tax Exemption and Marginal Relief, the Exemption Indicator will be shown as Y and the Higher Rate of Tax will be shown as 40%. The Exemption Case Indicator is shown on both the electronic and paper versions of the P2C.

The employee's entitlement to this relief is decided by Revenue - the employer should just operate PAYE in accordance with the P2C issued.

For more information on Tax Exemption and Marginal Relief, check the website at: Exemption and Marginal Relief or read Revenue Leaflet IT 8

Back to Top

9. What are the values for Field 21 - Exemption Case Indicator?

There are 2 possible values for this field:

  1. Y - meaning Yes, the employee/pensioner is entitled to Tax Exemption and Marginal Relief.
  2. N - meaning No, the employee/pensioner is not entitled to Tax Exemption and Marginal Relief.

10. Does the employer need to show the 40% Marginal Relief Tax Rate on the Form P45 or P60?

No. Tax rates are not included when completing a Form P45 or a Form P60.

Back to Top

11. What is a PAYE Exclusion Order?

If a person is employed abroad by an Irish employer (and all the duties of the employment are carried out abroad) and will be non-resident in the tax year, a PAYE Exclusion Order is issued. The employer must submit full details in writing to the appropriate Regional Revenue office.

An Exclusion Order is not the same as Tax Exemption and Marginal Relief.

If you have a current exclusion order for an employee then that employee should not be included on the PAYE system and details of their income should not be included on the P35 return.

More details about Exclusion Orders.

Back to Top

12. Who do I contact if I have another question?

The ROS Help Centre provides detailed guidance on all ROS facilities including more detailed information on using ROS.

ROS Helpdesk Contact Details

For more information contact the ROS Helpdesk at 1890 201 106 or email roshelp@revenue.ie.
International customers may contact us via the email address above or call +353 1 702 3021.

The Employer Customer Service Unit provides information and support to employers.

Contact details as follows:

Telephone: 1890 25 45 65 (+ 353 1 7023014 if ringing from outside the Republic of Ireland).

MyEnquiries: select "Employers PAYE" in the "My Enquiry Relates To" box and "Employer PAYE – General Query" in the "And More Specifically" box.

October 2016

Back to Top


Print this page