AITI Chartered Tax Adviser

What are the PRSI contributions?

If you are an employee (an employed contributor), you pay PRSI through the PAYE system, and if you are self-employed (a self-employed contributor), you pay through the self-assessment system. Your employer is responsible for paying your contribution, which is made up of:

(a) your employee contribution as an employee (4% PRSI + up to 10% universal service charge), and
(b) his employer contribution (up to 10.95%, with no ceiling).

The employer contribution and the employee contribution are calculated separately and then added.
Because the employer contribution is not payable in respect of contract workers, many employers are inclined, wherever possible, to avoid employment contracts and to use outside contractors rather than in-house staff. The Department of Social, Community and Family Affairs is well aware of this, and takes a keen interest in ascertaining the exact nature of the contract between the employer and the worker. If it is found to be an employment contract, the Department stands to gain the employer contribution