Employee pay day - calculating Income Tax and Universal Social Charge
Twice-monthly, quarterly, half-yearly and yearly pay periods
Note
The information on this page refers to your current obligations. For your obligations before 1 January 2019, please see the Employers Guide to PAYE.
Tax credits, tax and Universal Social Charge (USC) cut-off points are applied in different ways depending on how frequently you pay your employee.
Your employee may be taxed on an emergency basis. More information on how to apply this can be found in the emergency basis section.
Our weekly and monthly Income Tax calendar will help you organise your pay schedule.
Twice-monthly pay
For cumulative basis:
Payments made at the end of the month
Apply the cumulative tax credits, tax and USC cut-off points for the Income Tax month in which the payment is made. These are included on the Revenue Payroll Notification (RPN).
Mid-month payments
In January, amounts to be set against a mid-month payment are half of the tax credits, tax and USC cut-off points for month 1.
Amounts to be set against a mid-month payment made in any other month are the total of both:
- the cumulative tax credits, tax and USC cut-off points for the Income Tax month immediately before the payment is made
- half of the monthly tax credits, tax and USC cut-off points.
- Example
Pay day falls in mid-August.
You need to apply the total of the cumulative tax credits, tax and USC cut-off points for July. In addition you should apply half of the monthly tax credits, tax and USC cut-off points for August.
For month 1 basis, apply half of the monthly tax credits, tax and USC cut-off points shown on the RPN.
Quarterly pay
For cumulative basis, apply the following tax credits, tax and USC cut-off points:
| Payments made between (all dates inclusive) | Cumulative tax credits, tax and USC cut-off points due at |
|---|
|
1 January - 31 March
|
Month 3
|
|
1 April - 30 June
|
Month 6
|
|
1 July - 30 September
|
Month 9
|
|
1 October - 31 December
|
Month 12
|
For month 1 basis, apply one quarter of the yearly tax credits, tax and USC cut-off points shown on the RPN.
Half-yearly pay
For cumulative basis, no matter what date the payments are made:
- For the first payment, apply the cumulative tax credits, tax and USC cut-off points up to and including month 6.
- For the second payment, apply the cumulative tax credits, tax and USC cut-off points up to and including month 12.
For month 1 basis, apply half of the yearly tax credits, tax and USC cut-off points shown on the RPN.
Yearly pay
For cumulative basis, no matter what date the payment is made, apply the yearly amount of tax credits, tax and USC cut-off points.
For month 1, use the yearly amount of tax credits, tax and USC cut-off points.
Next: Payments for irregular periods