The often ignored P60 End of Year certificate can be used to get some of your hard-earned cash back!
You may not realise it, but your P60 form is actually a crucial document.
If you were employed in Ireland on 31 December 2017, then you should have received your 2017 P60 from your employer sometime between 1 January and 15 February.
Don’t just forget about it.
Because you could use it to reclaim some of your hard earned cash.
Well, what should interest you the most about your P60 are your Tax Credits – these credits reduce your income tax liability, and the amount of credits you get typically depends on your personal circumstances.
Everyone is entitled to at least the personal tax credit, which is €1,650 for single people. There is also a whole range of other credits available, including the rent tax credit, tuition fees, medical expenses, and home carer’s tax credit.
The issue is that payroll may not always factor in all of your tax credits, especially if your circumstances changed throughout the year, which could mean a possible refund. In this case you may be able to claim additional credits after the end of the tax year, which would mean a tax refund.
For example, a tax credit of €100 is a tax saving of €100. This basically means an extra €100 in your pocket.
So what exactly is a P60?
Your P60 is an end of year certificate of the pay, tax, Universal Social Charge (USC), and Pay Related Social Insurance (PRSI) deducted by your employer during the year.
According to a survey by Taxback.com in 2017, 61.4% (of 820 respondents) said they had no idea how much tax they paid each month. So if you’re in the same boat, you can use your P60 to figure this out!
If you weren’t working on December 31, 2017, then you won’t receive a P60 this year. You’ll get a P45 instead when you cease employment.
Your P60 explained, section by section
The top part of the P60 shows your personal details, i.e. your name, address, PPS number, tax credit and rate band information.
Your rate band is in this section:
|Single widowed, or surviving civil partner without qualifying children||€34,550 @ 20%, balance at 40%||€33,800 @ 20%, balance at 40%||€33,800 @ 20%, balance at 40%||€33,800 @ 20%, balance at 40%||€32,800 @ 20%, balance at 41%|
|Single, widowed or a surviving civil partner qualifying One Parent Family Tax Credit (2013), Single Person Child Carer Credit (2014)||€38,550 @20%, balance @ 40%||€37,800 @ 20%, balance at 40%||€37,800 @ 20%, balance @ 40%||€37,800 @ 20%, balance @ 41%||€36,800 @ 20%, balance @ 41%|
|Married or in a civil partnership (one spouse or civil partner with income)||€43,500 @ 20%, balance @ 40%||€42,800 @ 20%, balance @ 40%||€42,800 @ 20%, balance @ 40%||€42,800 @ 20%, balance @ 40%||€41,800 @ 20%, balance @ 41%|
|Married or in a civil partnership (both spouses or civil partners with income)||€43,550 @ 20% (with an increase of €25,550 max), balance @ 40%||€42,800 @ 20% (with an increase of €24,800 max), balance @ 40%||€42,800 @ 20% (with an increase of €24,800 max), balance @ 40%||€42,800 @ 20% (with an increase of €24,800 max), balance @ 40%||€41,800 @ 20% (with an increase of €23,800 max), balance @ 41%|
Note: The increase in rate band is capped at €25,550 or the amount of the income of the lower earner. This increase can’t be transferred between spouses or civil partners.
It’s important to look at this top section to confirm the year also. For example, you can use your 2017 P60 to claim a refund from 2017, and your 2016 P60 to claim a refund from 2016.
You’ve got four years to claim a refund, so in 2018, you should go back as far as your P60 from 2014 to see if you can claim anything.
The tax credit and band here is merely a summary of what’s been applied by payroll.
This part of your P60 confirms your gross taxable pay for the year.
This figure is calculated after any pension contributions have been deducted via payroll, which may explain any difference when you compare this figure to your gross pay stated in your contract of employment.
If you changed employment during the year, the details of your pay in this section will be subdivided into your salary from your previous employer and that paid by your current employer.
This part of your P60 confirms the total tax deducted for the year.
If you changed jobs during the year, the tax paid will be divided into that paid in your previous employer (s) and that paid by your current employer, giving a total summary for the year.
Shows any Local Property Tax you paid via your employer.
This section confirms the amount of pay subject to USC in the year.
This figure may not be the same as the amount of pay subject to tax because it’s calculated before any pension contribution deductions.
This section is somewhat similar to the PRSI section of the P60 as it contains details for this employment only.
If your income is greater than the exemption limit (€13,000 in 2017), you pay USC on your full income. A calculation of USC due is included in your End of Year Statement (P21).
The standard rates and thresholds of USC are in the table below.
2011 - 2014
This section confirms the total amount of USC deducted from your income in this employment.
This part of the P60 provides details of the PRSI paid in your current employment. PRSI paid in previous employments isn’t recorded here.
The first item in this section is your employee PRSI for the year, i.e. the PRSI that was actually deducted from your salary.
Before 2001, this amount would also have included the health levy, but now that’s been abolished, this part of your P60 is a lot easier to understand.
The second item in this section is total PRSI, i.e. employer and employee PRSI. If you deduct the figure in the first item from this total figure, you’ll see the total PRSI paid on your behalf by your employer in the year.
How much PRSI you pay depends on your PRSI class. This is dictated by your type of employment.
You can read more about PRSI rates in Taxback.com’s free guide to PAYE tax in Ireland.
The bottom section
The last section shows your employer’s details, including name, registration number and address.
Your P60 form isn’t an assessment!
It’s important to remember that the details on your P60 are based on information from your Tax Credit Certificate issued by Revenue. However, Revenue may be unaware you’re entitled to certain additional credits if you have a change in your personal circumstances (e.g. getting married, changing jobs, looking after a dependent).
You could be due a significant refund if:
- You’re married/in a civil partnership and one of you stays at home to look after a dependent (including your children).
- You had qualifying medical or dental expenses.
- You paid third-level tuitions fees for yourself or someone else.
- You got married.
- You changed jobs throughout the year.
- You’re in a job that entitles you to a flat rate expense.
How can I get a refund of tax with my P60?
You can apply directly with Revenue and use the information on your P60 to apply, however it can be difficult to know if you’re due a refund or not. You could use it to get a free, no-obligation refund estimate with Taxback.com.
When you apply, they’ll tell you how much overpaid tax, expenses and credits you’re due.
The amount you’re entitled to claim depends on factors like your earnings, expenses and amount of time worked.