Tax Credit Certificates

  1. Can you list the 5 new fields on the 2006 electronic Tax Credit Certificate?
  2. How do I get tax credit certificates for my employees in electronic format?
  3. Where can I get a copy of the file format for the employer copy of the 2006 electronic tax credit certificate?
  4. Can you explain the format of Field 2 - the employee PPS number?
  5. What new fields are included on the paper copy of the employer tax credit certificate?
  6. When are the employee's previous Total Pay and Tax included on the tax credit certificate?
  7. What is an FS19 letter?
  8. What pay and tax details will be included on the tax credit certificate?
  9. Will subsequent amended tax credit certificates include previous pay and tax details or will this pay and tax information only be shown on the first tax credit certificate issued after a new employee commences?
  10. If an employee commences and ceases with the same employer a few times during the tax year, will the previous pay and tax details on the tax credit certificate include amounts earned from this employer?
  11. As the tax credit certificate now includes details of all previous pay and tax 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?
  12. Can Revenue split the employee pay & tax details between amounts previously earned by the employee with this employer and amounts earned by the employee with other employers?
  13. Does the employer have to use the employee pay and tax details included on the tax credit certificate?
  14. What does the Exemption Case Indicator (Field 21) mean?
  15. What are the values for Field 21 - Exemption Case Indicator?
  16. How will an employer know who is entitled to Tax Exemption and Marginal Relief?
  17. Can you give a PAYE example of how Tax Exemption and Marginal Rate will work?
  18. Will tax credit certificates issue showing a 0% (zero percentage) rate?
  19. Does the employer need to show the 40% Marginal Relief Tax Rate on the Form P45 or P60?
  20. When does the employer tax an employee using the 40% marginal rate?
  21. What is Tax Exemption & Marginal Relief?
  22. What is a PAYE Exclusion Order?
  23. Where can I get copies of Revenue's PAYE Notices to Employers?
  24. When an employee has worked for the same employer a number of times during the tax year, what pay and tax figure does the employer enter on the Form P45 at Section (b)? [The question on Form P45 at Section (b) asks: - If employment started since 1 January last, enter Pay and Tax deducted (or Tax Refunded) for this period of employment only]
  25. When an employee has worked for the same employer a number of times during the tax year, what pay figure does the employer enter on the P60 at Section (A) PAY Question 3? [The question on P60 at Section (A) 3 asks: - Pay in respect of this employment]
  26. When an employee works for the same employer a number of times during the tax year, what pay and tax figures does the employer put on the P35?
  27. Can you explain Field 11 - the date on which the tax credit certificate ends?
  28. Who do I contact if I have another question?

1. Can you list the 5 new fields on the 2006 electronic Tax Credit Certificate?

The 5 new fields are:

  1. Field 19 Employee's Total Pay to date
  2. Field 20 Employee's Total Tax to date
  3. Field 21 Exemption Indicator
  4. Field 22 Standard Rate of Tax
  5. Field 23 Higher Rate of Tax

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2. How do I get tax credit certificates for my employees in electronic format?

For more information on tax credit certificates issued through the - Revenue On-Line Service - or telephone the ROS Helpline 1890 20 11 06

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3. Where can I get a copy of the file format for the employer copy of the 2006 electronic tax credit certificate?

The electronic file format of employer copy tax credit certificate for the year commencing 01/01/2007 can be downloaded from the Revenue website: /en/online/tax-credit-cert.html

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4. Can you explain the format of Field 2 - the employee PPS number?

Field 2 shows an employee's Personal Public Service Number (PPS number)
The field size is 9.

The format is 7 numeric (including leading zeros), a check character and a Space, W, T or X.

Example 1: PPS number 1234567A
This is the most common PPS number format - 7 numeric and a check character.

Example 2: PPS number 1234567AW
This format is used for the spouse of Example 1 - however, these W numbers are being phased out. Each person should get an individual PPS number from the Department of Social Protection.

Example 3: PPS number 1234567AT
This PPS Number format is used to advise the employer that the individual with PPS Number 1234567A also has a second live employment with the same employer. In other words, the employee has 2 employments with the same employer at the same time - the employee is on their payroll twice.

The tax credit certificate with PPS number 1234567A is used for the first employment.
The tax credit certificate with PPS number 1234567AT is used for the second employment with the same employer.

Example 4: PPS number 1234567AX
This PPS Number format is used to advise the employer that the spouse with PPS Number 1234567AW has a second live employment with the same employer. In other words, the employee has 2 employments with the same employer at the same time - the employee is on their payroll twice.

The tax credit certificate with PPS number 1234567AW is used for the first employment.
The tax credit certificate with PPS number 1234567AX is used for the second employment with the same employer.

Note 1: In the Examples 3 & 4 above, it is the employer's choice to put the employee on the payroll twice. The employer wants to keep the two sets of pay separately on their payroll records. There is no requirement or obligation to do this. Other employers would just put the employee on the payroll once - and pay the extra wages or salary altogether.

Note 2: PPS numbers have issued in this format for a number of years - there is no change in the PPS number format for 2006.

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5. What new fields are included on the paper copy of the employer tax credit certificate?

The 3 new fields on the paper tax credit certificate for 2006 are:

  • Total Gross Pay - will be shown in the box
  • Total Tax - will be shown in the box
  • Exemption Case - Y or N indicator will be shown in the box
    If the Exemption Case indicator is Y, the Higher Rate of Tax will be shown as 40%
    If the Exemption Case indicator is N, the Higher Rate of Tax will be shown as 42%

The Total Gross Pay and Tax will not be shown where a certificate is issued on a week1/month 1 basis.

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6. When are the employee's previous Total Pay and Tax included on the tax credit certificate?

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

The use of the FS19 letter to advise employers of an employee's previous pay & tax details was discontinued with effect from 1 January 2006.

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

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7. What is an FS19 letter?

In previous years, an FS19 letter was sent by Revenue to employers to advise them of the new employee's Total Pay and Tax from their previous employment(s). In some cases, where the employer was already aware of the employee's previous Total Pay and Tax (for example - from the employee's P45) the FS 19 letter was not issued.

From 1 January 2006, the employee's previous Total Pay and Tax (if known) is included on the tax credit certificate sent to the employer. The use of the FS 19 letter is discontinued.

If the employee's previous Total Pay and Tax is not known, the tax credit certificate will be issued on a week1/month 1 basis.

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8. What pay and tax details will be included on the tax credit certificate?

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

Example 5: If employee commences in Company A on 22 June 2006, the employee's previous pay and tax for the period 1 January 2006 to 21 June 2006 (if any) will be included on the tax credit certificate issued to Company A in June 2006. If these pay and tax details are not known, the certificate will issue on a week1/month1 basis.

Example 6: If the employee in Example 1 leaves Company A on 10 August 2006 and recommences in Company A on 15 October 2006, the pay and tax details included on the certificate sent to Company A in October 2006 will include all details of the employees pay and tax from 1 January 2006 to 14 October 2006.

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9. Will subsequent amended tax credit certificates include previous pay and tax details or will this pay and tax information only be shown on the first tax credit certificate issued after a new employee commences?

All subsequent amended cumulative tax credit certificates will include details of the employee's previous pay and tax.

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

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

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

Example 7: If an employee works for Company A from 1 January 2006 to 30 March 2006, then works for Company B for a few months and returns to Company A on 10 October 2006, the pay and tax figures included on the tax credit certificate issued to Company A in October 2006 will include all pay and tax from 1 January 2006 to 9 October 2006.

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11. As the tax credit certificate now includes details of all previous pay and tax 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 tax credit certificate will not give a breakdown of each employment or employer where the employee received the earnings or paid the tax - 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 and tax already paid to the employee during different periods of employment but they must use the cumulative pay and tax from all employments to date when calculating PAYE liability.

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12. Can Revenue split the employee pay & tax 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 and tax details to show the amounts earned by the employee with each employer. The tax credit certificate will show just one figure for pay and one figure for tax. The previous pay and tax details will be the total amount earned by the employee from 1 January to the date the employee commences in the new employment.

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13. Does the employer have to use the employee pay and tax details included on the tax credit certificate?

In most cases, the employer will use the pay and tax figures from the tax credit certificate. These pay & tax 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 and tax details are included on the tax credit certificate to assist the employer in calculating the correct PAYE due. The pay and tax figures are the most up-to-date figures available to Revenue. If the pay and tax figures are not available, the tax credit certificate will be on a week1/month1 basis.

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

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14. 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 tax credit certificate.

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

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

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15. 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. In this case, the employee rates of tax for 2006 are 20% and 40%
  2. N - meaning No, the employee/pensioner is not entitled to Tax Exemption
    and Marginal Relief. In this case, the employee rates of tax for 2006
    are 20% and 42%

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16. How will an employer know who is entitled to Tax Exemption and Marginal Relief?

Look at the Higher Rate of Tax - it's the quickest way to check.

Where an employee or pensioner is entitled to Tax Exemption and Marginal Relief, the Higher Rate of Tax 40% will be shown on the tax credit certificate.

Only a very small number of individuals, mostly PAYE pensioners, qualify for Tax Exemption and Marginal Relief each year.

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17. Can you give a PAYE example of how Tax Exemption and Marginal Rate will work?

See: Tax Exemption and Marginal Relief:

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18. Will tax credit certificates issue showing a 0% (zero percentage) rate?

No. There is no 0% rate. Tax credit certificates will issue showing either 20% & 42% for most employees or 20% & 40% (2006 rates) for employees entitled to Tax Exemption and Marginal Relief.

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19. 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.

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20. When does the employer tax an employee using the 40% marginal rate?

To tax an employee at 40%, an employer must have a current tax credit certificate for the employee indicating that the employee is entitled to Tax Exemption and Marginal Relief.

The certificate will show the Higher Rate of Tax as 40%

There are no other circumstances where an employer can use the marginal rate 40%

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21. What is Tax Exemption & Marginal Relief?

Any individual/married couple whose total income from all sources is less than or equal to the exemption limit will not have to pay tax for that year. Any dividual/married couple whose total income from all sources is slightly over the exemption limit may qualify for marginal relief. The decision on any individual's entitlement to Exemption & Marginal Relief is made by the Inspector of Taxes - not by the employer. The employer must operate PAYE in accordance with the tax credit certificate issued. More information on Exemption & Marginal Relief

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22. What is a PAYE Exclusion Order?

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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

23. Where can I get a copies of Revenue's PAYE Notice to Employers?

On the Revenue website: PAYE Notice to Employers

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24. When an employee has worked for the same employer a number of times during the tax year, what pay and tax figure does the employer enter on the Form P45 at Section (b)? [The question on Form P45 at Section (b) asks: - If employment started since 1 January last, enter Pay and Tax deducted (or Tax Refunded) for this period of employment only]

The term 'this period of employment only' means the latest period of employment.

Example 8: Employee works for 3 periods during 2006 with the same employer

Period 1: 1 January 2006 to 10 March 2006
Period 2: 14 July 2006 to 5 August 2006
Period 3: 17 October 2006 to 22 November 2006

When the employer issues a P45 on 22 November 2006, the employee pay and tax figures for the period 17 October 2006 to 22 November 2006 only should be entered at Section (b) on the P45

The Total Pay and Tax from all employments for the period 1 January 2006 to 22 November 2006 (including other employers, if any) should be entered at Section (a) on the P45

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25. When an employee has worked for the same employer a number of times during the tax year, what pay figure does the employer enter on the P60 at Section (A) PAY Question 3? [The question on P60 at Section (A) 3 asks: - Pay in respect of THIS employment]

The term 'Pay in respect of THIS employment' means pay in respect of the THIS latest period of employment.

Example 9: Employee works for 4 periods during 2006 with the same employer

Period 1: 1 January 2006 to 15 February 2006
Period 2: 21 April 2006 to 10 June 2006
Period 3: 18 August 2006 to 29 September 2006
Period 4: 24 November 2006 to sometime in 2007

When the employer issues a P60 on 31 December 2006, the employee's Pay figure for the period of employment from 24 November 2006 to 31 December 2006 only should be entered at Section (A) 3 on the P60. The employees Tax figure for the period 24 November 2006 to 31 December 2006 only should be entered at Section (B) 3 on the P60.

The Total Pay and Tax from all employments for the period 1 January 2006 to 31 December 2006 (including other employers, if any) should be entered on the P60 at Sections (A) 1 and (B) 1 respectively.

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26. When an employee works for the same employer a number of times during the tax year, what pay and tax figures does the employer put on the P35?

See - Frequently Asked Questions on the P35

Answer to the above question

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27. Can you explain Field 11 - the date on which the tax credit certificate ends?

Some tax credit certificates - for example: week 1/month 1 basis certificates - are issued for one year only. The certificate will show an end date of 31 December of that year.

A new tax credit certificate will be issued for this employee in the preliminary Bulk Issue of tax credit certificates that takes place in October/November each year. This new certificate will be effective from the start of the following tax year.

Example 10: A week 1 basis certificate issues for an employee on 10 August 2006 - this certificate shows a certificate end date 31 December 2006. The employer should only use this certificate up to the end of the tax year 2006 - 31 December 2006.

In the preliminary Bulk Issue of tax credit certificates for 2007 - in October or November 2006 - a new tax credit certificate will be issued for this employee. This new certificate can be used from 1 January 2007 in the normal way. There is no need to put the employee on the Emergency Basis of Tax Deduction or on a week 1/month 1 basis.

Note: There are a number of other reasons why a tax credit certificate would issue showing a certificate end date. However, the procedure to be adopted by the employer in all instances is as outlined above.

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

It is important that you contact the appropriate Revenue section so that your question can be answered quickly and correctly.

  • Queries on the Revenue On-Line Service (ROS) should be directed to the ROS Helpline 1890 20 11 06
  • Technical queries about the file format of electronic tax credit certificates should be directed to: Anne Carey (01) 6748710 or email acarey@revenue.ie
    Or check the website - Online Services.
  • Queries in relation to specific tax credit certificates or the issue
    of new or amended tax credit certificates for your employees should be
    directed to the Revenue District shown on the
    employer copy of the tax credit certificate.
  • General business queries about tax credit certificates should be directed to the Employer Information and Support Service 1890 25 45 65

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