Tax status

Emergency tax status >

Emergency tax is non-cumulative and calculates on a period-by-period basis. Calculations apply to the employee's taxable pay in the current pay run only. The calculation doesn't include payments from the beginning of the tax year.

When should an employee be on emergency tax status?

You should put an employee on the emergency tax status if any of the following apply:

The employee is new to your company
The employee hasn’t provided you with their PPS number. If this scenario occurs, the employee pays tax at 41% on their total taxable earnings in the current pay run
Revenue states on the employee’s RPN that their tax status is emergency

CAUTION: Employees should remain on emergency tax status until Revenue tells you otherwise. This will be via RPN.

Week 1 tax status >

Week 1 / month 1 tax is non-cumulative and calculates on a period-by-period basis. Calculations apply to the employee's taxable pay in the current pay run only. The calculation doesn't include payments from the beginning of the tax year.

When should an employee be on week 1 tax status?

You must put an employee on the week 1 tax status if:

They’re new to your company
They have provided you with RPN previous employment information

To verify the values on the RPN, you should check with Revenue.

CAUTION: The employee remains on this tax status until Revenue tells you otherwise. This will be via RPN.

Normal tax status >

Normal tax calculates on a cumulative basis. The calculation uses year to date values rather than pay run values. This includes all gross pay and tax paid values to date within the current tax year. The values could relate to your employment or previous employment.

The tax allowances are also cumulative. If the employee has been on emergency or week 1 status, you might find they pay less tax. They might get a tax refund when you change their tax status to normal.

When should you assign an employee normal tax status?

You put an employee on the normal tax status if Revenue tells you to. Revenues RPN certificate will inform you when the tax status is normal or cumulative.

Exempt tax status >

Exempt tax status means that the employee shouldn’t pay any tax for the entire tax year. If they have paid tax in a previous pay run, the system refunds this back to them the next time you process their pay.

When should an employee be on exempt tax status?

You should only put an employee on the exempt tax status if Revenue tells you to. Revenues RPN certificate will inform you when the tax status is exempt.

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