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Why Are My Taxes So High?

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When an employer processes a payslip they need to know what your tax details are in order to calculate the correct taxes for your circumstances.

In order for this information to be available to the employer, you must have registered with Revenue as an employee for Pay As You Earn.

New employees to the Irish labour market must regsiter with the DEASP to get a PPS Number, and then with Revenue to become an employee.

Revenue issue your employer with a tax certificate, called a Revenue Payroll Notification, which contains all the details about how to tax an employees income.

The RPN contains the details of:

  • Income Tax Credits
  • Income Tax Standard Rate cut off point
  • Universal Social Charge tax rates and cut off point
  • Local Property Tax
  • Method of Calculation

As an employee, you might work with multiple employers, or may have changed jobs. You can reallocate your Tax Credits and SRCOP using the Revenue website myAccount.

There are two main reasons for high tax rates in a payslip.

  1. No Revenue Payroll Notification Available
  2. No available Tax Credits or Cut Off Points

Revenue have a full list of reasons here.

No Revenue Payroll Notification Available

There are two reasons for not having a RPN available.

No PPS Number

If you don’t have a PPS number you will be on Emergency Tax.

Information on how to apply for a PPS number can be found here

No Revenue Payroll Notification Available

If you have a PPS Number, but have not registered as an employee for Paye As You Earn, then you will be on Emergency Tax.

You can register as an employee for PAYE here.

No Tax Credits Allocated

This reason is more complicated.

If you have an RPN then you are not on Emergency Tax. However, you might still be subject to very high rates of tax if your Tax Credits and Standard Rate Cut Off Points are allocated elsewhere.

The main reasons for no tax credits are:

Tax Credits Allocated to Another Employer

If you work multiple jobs, or have recently changed jobs, then your tax credits and standard rate cut off points may be allocated to the other job.

If you have finished your old job, then the previous employer may not have gotten around to ceasing you correctly in ROS. You can do that yourself in myAccount.

A guide on how to cease your own employment is here. Select ‘Update Job or Pension Details’ on the PAYE Services card in myAccount.

If this is a second employment, but is now going to form the bulk of your income, then you may want to reallocate credits to your new job. You should log onto myAccount and change your tax allocations.

You do this on myAccount under Jobs and Pensions. See Revenue guide here.

No Tax Credits Available Due To Income Supports

Some income supports are taxable by reductions to your tax credits and SRCOP. If you have been on income supports you may have reduced amounts of credits available.

So Which Issue Do I Have?

Take a look at your Parolla Payslip in the box labelled Revenue Details.

If the Tax Basis says Emergency then the employer does not have an RPN for you, and is applying Emergency Tax Rates.

If the Yearly PAYE Credit is zero, or very low, then you may want to reallocate your tax credits.

If the PAYE 20% Cutoff is zero, or very low, then all of your income will be taxed at 40%. You may want to reallocate your tax credits on myAccount.

Why Can’t My Employer Sort This Out?

Your tax affairs are between you and The Revenue.

You need to contact Revenue via their help line, or over myAccount, and make sure that you are on the correct tax rates for your circumstances.

A link to The Revenue Jobs and Pensions Help Line is here.

Your employers hands are tied. They must apply the latest RPN available at the time of running the payroll. They do not have any latitude for changing the instruction on the RPN.

Will I Get My Taxes Back?

Yes, but some methods are faster than others.

Fastest: Once you sort out your RPN, and move to cumulative tax basis, the payroll software will refund any taxes that may be due to you.

Or, you could contact Revenue directly.

Slowest: You could wait until the end of the year when Revenue will look at your income for the whole year and make any repayments as required.

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