Taxation of the Pandemic Unemployment Payment (PUP)

Taxation of PUP received in 2021 and 2022

PUP was taxed in real-time during 2021 and 2022. This means you were taxed on PUP income when you were paid. PUP payments earned in 2021 and 2022 were treated like other Department of Social Protection (DSP) taxable payments.

This process ensured tax was collected on the payment at the right time. It also limited any additional liabilities at the end of the year.

The DSP informs Revenue on a weekly basis of the amount of taxable PUP paid to each recipient. Then:

• Any tax due is collected by reducing the person’s tax credits and rate band. To do this, Revenue ‘annualises’ the weekly amount of PUP. This is calculated by multiplying the weekly amount by 52. The annual tax credits and rate band are reduced by this amount.
• The adjusted tax credits and rate band are applied on a week 1 basis.
• The revisions are shown on the employee’s Tax Credit Certificate (TCC). A revised Revenue Payroll Notification (RPN) is made available to their employer.

In most cases, there was no additional tax liability at the end of 2021. No additional liability should arise for 2022.

Joint assessment

You may be taxed under Joint assessment. Your spouse or civil partner's tax credits will be reduced if you have insufficient tax credits for this reduction to apply. This will allow Revenue to collect the additional tax due.

Next: Process when PUP payments have ended