PAYE (Pay As You Earn) is tax deducted from your salary. PAYE is related to salaries and therefore is relevant for employees.

When you pay?

If you are an employee and your salary is above the taxable limit (€19,500).

Who pays?

The PAYE is not pay directly by you but is deducted from your gross salary by your employer. Then, the employer will pay the tax deducted from your gross salary to the local tax authorities. Therefore, it is payable by your employer on behalf of you.

Who calculate the PAYE and when?

The monthly PAYE is estimated on the beginning of each year (January) by your employer through a self-assessment estimation. For the estimation of the monthly tax, your employer will request from you to complete the form I.R. 59. In the case you join a new employer in the middle of the year, PAYE will be estimated on the month you registered as an employee.

Frequent of payment

It is payable on a monthly basis.

Changes on salaries

Any salary changes (i.e. increase or bonus) during the year will affect your monthly PAYE accordingly.

More than 1 employer at the same time

If you work for more than 1 employer at the same time, then you need to notify 1 of the 2 employer your extra salary. PAYE will be calculated and deducted from your salary only by the employer of your choice.

How PAYE related to annual tax return?

On 31 March on each year, you have an obligation to submit your tax return of the previous year. By completing your tax submission, your tax obligation should be ZERO since your employer was already pay your taxes by deducting the relevant amount from your gross salary. Any differences indicate that

  • you did not complete the from I.R. 59 correctly
  • your accountant estimation was not accurate
  • the details you submitted online are not correct

Remember: For the completion and submission of your personal income tax, your employer needs to provide you with the form I.R. 63.

Disclaimer: The information provided in this article is for general awareness and is not intended to be and do not constitute a professional advice.