Where an employee has more than one employment, it is important that tax credits, standard rate cut-off points and Universal Social Charge cut-off points are allocated correctly between the employments.
The employee should contact his or her relevant Tax Office and ask to have the tax credits and cut-off points apportioned based on the percentage of total earnings in the two employments. Failure to do this can lead to earnings in the second employment being assessed on an emergency basis or being taxed in full at the high rate of tax (41%) and USC (7%). If the second employment is taken up midway through the tax year, it is important to ensure that sufficient tax credits and cut-off points remain in the first employment to avoid a large arrears of tax and USC in the first employment.
This is quite a common problem in the nursing home and home care sectors where employees often have more than one part-time job.
At the end of each tax year, employees with more than one employment should request a P21 balancing statement from the Revenue Commissioners to ensure that there is no underpayment or overpayment of tax and USC. Revenue will take the combined earnings and calculate the total amount due in tax and USC based on the total tax credits and cut-off points. These totals are then compared with the sum of the amounts deducted in each employment and any difference is calculated.
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