Starting Work and Tax
- Basic information
- What do I need to do?
- What happens next?
- When do I start to pay income tax?
- What do I pay tax on?
I am about to start working for the first time and I want to know what I must do to sort out my tax
Revenue will try to make it as easy as possible for you to understand your entitlements and obligations. The following Questions and Answers are designed to give you enough information to get your tax sorted out in time for your first pay cheque.
If having read the following material you still have some questions you would like answered, you can contact us on the LoCall 1890 telephone service - Contact Details
Your new employer must deduct tax from your pay under the PAYE system. To make sure that your tax is properly dealt with from the start and that your employer deducts the right amount of tax from your pay you should do two things:
- Register for myAccount – a single access point for all of Revenue’s secure online services.
- Once you have received your password for myAccount, register the details of your new job through the Jobs and Pensions service in myAccount. You will need your employer’s tax registration number to do this and you can get this from your employer.
Ideally, you should do all this as soon as you accept an offer of a job - even if it is only part-time or holiday employment. This will give your employer and the tax office time to get things sorted out before your first payday.
We will send a tax credit certificate to your employer which shows the total amount of your tax credits and rate band.
You will be able to view your tax credit certificate on PAYE Anytime (also available within myaccount) within two working days.
You will normally start to pay tax from your first payday. The amount of tax you pay depends on your level of pay and the amount of your tax credits. If your pay on any payday is less than your tax credits then you don’t pay tax on that pay-day. If your pay is more than your tax credits, you pay tax on the difference.
If you start work in the first week / month of the tax year your employer will deduct one week’s / month’s fraction of your annual tax credits from your first week’s / month’s pay and will deduct tax from the balance.
If you start work in (say) the 27th week of the tax year your employer will calculate your gross tax on your wages, but you will have 27 weeks tax credits to offset against this liability, this will continue until you utilise all your unused tax credits.
You pay tax on earnings of all kinds arising from your job including bonuses, overtime, non-cash pay - known as benefit-in-kind, for example the use of a company car.
You do not pay tax on:
- Scholarship income.
- Interest from Savings Certificates, Savings Bonds and National Instalment Savings Schemes with An Post
- Payments to approved pension schemes.