Employee pay day - calculating Income Tax and Universal Social Charge

Twice-monthly, quarterly, half-yearly and yearly pay periods

Note

The information on this page refers to current employer obligations. For employer obligations before 1 January 2019, please see the Employers' Guide to PAYE.

Tax credits, tax cut-off points and Universal Social Charge (USC) cut-off points are applied in different ways.  This depends on how frequently an employer pays an employee.

An employee may be taxed on an emergency basis. More information on how to apply this can be found in the emergency basis section.

Our weekly and monthly Income Tax calendar will help an employer organise their pay schedule.

Twice-monthly pay

For cumulative basis:

Payments made at the end of the month

An employer must apply the following for the Income Tax month in which the payment is made:  

• the cumulative tax credits,
• tax cut-off points
• and
• USC cut-off points. 

These are included on the Revenue Payroll Notification (RPN).

Mid-month payments

In January, amounts to be set against a mid-month payment are half of the following for month 1:

• tax credits
• tax cut-off points
• and
• USC cut-off points.

Amounts to be set against a mid-month payment made in any other month are the total of both:

• the cumulative tax credits, tax cut-off points and USC cut-off points for the Income Tax month immediately before the payment is made
• and
• half of the monthly tax credits, tax cut-off points and USC cut-off points for the current Income Tax month.

For month 1 basis, the employer must apply half of the monthly tax credits, tax cut-off points and USC cut-off points shown on the RPN.

Quarterly pay

For cumulative basis, the employer must apply the following tax credits, tax cut-off points and USC cut-off points:

For month 1 basis, the employer must apply one quarter of the yearly amount shown on the RPN for the following:

• tax credits
• tax cut-off points
• and
• USC cut-off points.

Half-yearly pay

For cumulative basis, no matter what date the payments are made by the employer:

• For the first payment, the employer must apply the cumulative tax credits, tax cut-off points and USC cut-off points up to and including month 6.
• For the second payment, the employer must apply the cumulative tax credits, tax cut-off points and USC cut-off points up to and including month 12.

For month 1 basis, the employer must apply half of the yearly tax credits, tax cut-off points and USC cut-off points shown on the RPN.

Yearly pay

For cumulative basis, no matter what date the payment is made, the employer must apply the yearly amount of:

• tax credits,
• tax cut-off points 
• and
• USC cut-off points.

For month 1 basis, an employer must apply the yearly amount of tax credits, tax cut-off points and USC cut-off points shown on the RPN.

Next: Payments for irregular periods