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 is actually a really important document.
Let me state it once more…
If you were employed in Ireland on 31 December 2017, then you should get 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 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, USC, and PRSI deducted by your employer during the year.
According to a survey Taxback.com in 2017, out of 820 respondents, 61.4% 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 31 December 2017, then you won't receive a P60 this year. You’ll get a P45 instead when you cease employment.
Watch the video below to see how your P60 can help you claim a refund:
Your P60 Broken Down-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
Your income up to a certain limit or ‘rate band’ is taxed at the standard rate of income tax, which is currently 20%. Any income above this limit is taxed at the higher rate of tax, which is currently at 40%.
You'll find your rate band for the current tax year and previous 4 years in this table:
It’s important to look at this top section of your P60 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.
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||Rate|
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 1st 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 2nd item in this section is total PRSI i.e. employer and employee PRSI. If you deduct the figure in the 1st 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 and you can find more information on PRSI classes in our Bullsh*t-Free Guide to PAYE Tax in Ireland here.
The Bottom Section
The last section shows your employer’s details, including name, registration number and address.
Click here to view a handy interactive example of the P60 End of Year Certificate with information on each section.
Your P60 isn't an assessment!
It's important to remember that the information on your P60 is 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).
For example you won’t automatically get the Home Carer Credit or relief for tuition fees if they haven't been informed of your situation. And according to a survey conducted by Taxback.com last year, out of 823 respondents, 56.3% said they hadn’t claimed for any medical expenses in the last 4 years.
It's important to remember that you can go back 4 years to claim a refund in Ireland, so keep those receipts for any qualifying medical or dental expenses in a safe place!
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 3rd 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.
The amount you’re entitled to claim depends on factors like your earnings, expenses and amount of time worked.
Here are some cases where people used the information on their P60s to get a tax refund.
1.Ellen Casey is married and her husband stays at home to take care of their two sons. He doesn’t work outside the home.
Ellen works full-time and has been allocated the married person’s tax credit of €3,300.
However, we noted that she wasn’t allocated the home carer tax credit for 2017 of €1100 to which she is entitled because she is jointly assessed with her husband who takes care of their children in the home.
Refund: Ellen can now make a claim for this credit now that the tax year is over and seek a refund of €1100.
2.Michael Murphy is married and both he and his wife work outside of the home.
His wife works part-time and therefore Revenue allocated some of her bands and credits to Michael.
However, as his hours were reduced during the year he hasn’t these in full and it would be advisable for his wife to now check her P60 to determine whether or not she paid any tax during the year.
If she did pay any tax it’s likely she’ll be due a refund.
In Michael’s case he has been allocated a tax credit of €4,950. This is the married person’s personal tax credit of €3,300 plus the PAYE tax credit of €1,650.
Refund: Michael’s wife should expect to see a tax credit of €1,650.
3.Conor Kennedy is unmarried, works full-time and attends a 3rd level course in computing in the evening.
Conor has been allocated the single tax credit of €1,650 plus the PAYE tax credit of €1,650.
He pays the fees for his college course himself and he is in his first year of the course which is €4000 per year.
Revenue doesn't know he has paid college fees so when he gets his P60 he can claim relief for the fees.
The disregard amount for a part-time course is €1,500, but he can claim the standard 20% relief on the remaining €2500.
Refund: Conor is entitled to 20% relief on this amount which comes to a total of €500 for 2017.
As well as using your P60 to get a tax refund, it’s is also important if you want to claim a benefit as you would send a copy of it to the Department of Social Protection as evidence of paid PRSI contributions.
So make sure you use your P60 and then store it in a safe place!
Filing your tax return
If you think you’re owed tax back, then you can use the information on your P60 to file a tax return with Revenue.
However, according to a survey we ran last year, most people who were asked if they were confident to do their own tax returns answered no. In fact a whopping 85.3% said they would prefer help from a tax expert.
Whether this is because they’re fearful of doing something wrong or that Revenue makes it too difficult for people, we are not sure. But we are sure that we can help!
To get an accurate estimate of what you could be owed, simply apply with Taxback.com here and we’ll let you know what you’re owed, for free, with no-obligation.
And if you choose to file, we can also prepare and file all the paperwork for you!
With over 1 million tax returns filed since 1996, you know your money and taxes are in safe hands!