Understanding PRSI Contributions for People Who are Self Employed
Self-employed individuals aged between 16 years & 66 with earnings of €5,000 or more per annum must pay Class S PRSI. This applies if you:
- are self-employed i.e. in business on your own account, for example a farmer, artist, professional person (doctors, dentists, solicitors etc.) or if you are in a partnership,
- have income from investments, rents or maintenance payments,
- are a working director who own or control 50% or more of the shares in a company in which you work. The classification of working directors who own less than 50% of the shareholding of the company is determined on a case by case basis.
The following people do not pay PRSI at Class S:
- ‘prescribed relatives’ (husband, wife, mother, father, son, daughter, brother or sister) who help a self-employed person with their business but who are not partners in the business. If you employ a relative you must contact the Scope Section, for a decision on the relative’s social insurance class,
- People whose total income from self-employment (earned & unearned) and employment is below €5,000 a year,
- People classified by Revenue as non-residents who hold solely unearned income,
- People insured as employees whose only other income is unearned such as dividend payments or rent. They are liable to PRSI at Class K on this income,
- People in receipt of a pension arising from a previous employment of theirs or their spouse, or civil partner who are under pensionable age and whose only other income is unearned,
- Public servants paying PSRI at Class B, C or who are also self-employed. From January 2013 these contributors who have self-employed income from a trade or profession are liable at Class K on this income.
- Certain public office holders in respect of their income from public office.
There are 3 sub-classes within class S:
- Class S0: earnings of up to €500 per week are liable to PRSI at 4%
- Class S1: earnings in excess of €500 per week are liable to PRSI at 4%
- Class S2 (medical card holders, widows & widowers, lone parents): earnings in excess of €500 per week are liable to PRSI at 4%.
PRSI Class S provides cover for:
- Widow’s, Widower’s or Surviving Civil Partner’s (Contributory) Pension,
- Guardian’s Payment (Contributory),
- State Pension (Contributory),
- Maternity & Paternity Benefit,
- Adoptive Benefit,
- Treatment Benefit (Dental, Optical & Aural) with effect from 27 March 2017.
If you stop being self-employed or your annual income falls below the €5,000 limit, and you are under pensionable age, you may apply to become a voluntary contributor, in order to maintain the continuity of your PRSI record for pension purposes.
Please contact our Taxation Services department if you have any queries on the above.