PRSI and Family Employment

With very few exceptions, all people aged 16 or over and under pensionable age or in the case of a person born on or after 1 January 1958 who is aged between 66 and 70 years and has not been awarded the State Pension (Contributory), must pay PRSI if they are:

• employees, whether full-time or part-time earning €38 or more a week
• self-employed workers with an income of at least €5,000 per year or more from all reckonable sources

In return, they are covered for a range of Social Insurance benefits and provisions see Benefits Covered under the main PRSI Classes.

Exceptions to this general rule apply in the case of certain 'Family Employment'. This term is used to describe a situation in which a self-employed sole trader/businessperson either employs, or is assisted in the running of the business, by a spouse/civil partner or by other family member(s). (Employment by a Limited Company or a business partnership is not "Family Employment" because the employment relationship is with the Limited Company or the business partnership, rather than the individual family member(s).

The following categories of 'Family Employment' are insurable under the Social Insurance system in exactly the same way as employments that have no family connection:

• if you are employed as an employee by a 'prescribed relative'* and the employment is not related to a private dwelling house or a farm in or on which both you and the employer reside (PRSI Class A or Class J applies)
• if you are employed as an Apprentice by a 'prescribed relative'* (even if the apprenticeship employment does relate to a private dwelling house or a farm in or on which both you and the employer resides). There must be a registered Contract of Apprenticeship involved (PRSI Class A or Class J applies)
• before 2014, spouses and civil partners of self-employed sole traders who worked in the business (either as an employee or in another capacity) were not liable for PRSI. Since 2014, certain spouses and civil partners of self-employed sole traders can pay PRSI and therefore establish entitlements to benefits in their own right. People affected by this change are people who work in their self-employed spouse or civil partner’s business doing similar or ancillary (supporting) tasks but who are not business partners or employees. The €5,000 income threshold applies to these spouses or civil partners in the same way as other self-employed people, so if a spouse or civil partner earns less than this threshold they are not liable to pay PRSI
• A 'Prescribed relative', as laid down in legislation, is a parent, grandparent, stepparent, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother, or half-sister.

The following categories of 'Family Employment' are the exceptions that are not covered by the Social Insurance system:

• if you are employed as an employee by your spouse/civil partner
• if you are employed as an employee by a 'prescribed relative' and the family employment relates to a private dwelling house or a farm in or on which both you and the employer reside
• if you are not a spouse or civil partner and you assist or participate in the running of the family business but not as an employee (such as, a son/daughter who is attending full-time education and who participates in the business on a casual basis for example, helps out on a farm after school hours but is not an employee)

NOTE

• PRSI Class M is used to record situations in which there is a nil contribution liability
• Subject to certain conditions, if you cease to be covered by compulsory PRSI you may opt to become insured on a voluntary basis and pay Voluntary Contributions

For more information on Voluntary Contributions see: Operational Guidelines: PRSI - PRSI Voluntary Contributions

Employed as an Employee, means that you are employed in the family business under the same terms and conditions as a worker who is not a relative. You would, for example, be subject to control, direction and dismissal by the employer, receive a salary and holiday pay and have no control over the running of the business.

If the business is a Limited Company or Partnership, then for PRSI purposes the employment is not considered “Family Employment”.

This is because the employment relationship is with the Limited Company or Partnership rather than the individual family member (prescribed relative as defined by legislation) who owns or runs it.

If you work for a Limited Company that is owned by a spouse/civil partner or a family member, the PRSI you pay is determined by the circumstances of your employment.

• if employed as an employee, you are insurable (PRSI Class A or Class J applies)
• if you are not an employee but participate in the running of the company or if you hold a directorship/shareholding position and have control over its operations, you may be treated as a self-employed contributor. PRSI Class S applies if you have reckonable income of at least €5,000 per year from all sources

From 1 July 2013 proprietary directors who own or control 50% or more of the shareholding of a company, either directly or indirectly e.g., through a holding company, are classified as self-employed and liable to pay PRSI at Class S. The classification of proprietary directors who own or control less than 50% of the shareholding of the company will continue to be determined on a case-by-case basis, taking into consideration the "Code of Practice on determining Employment Status". Code of Practice on Determining Employment Status can be found here.

The key question is whether or not you are employed as an employee. The factors that are considered in deciding this matter are quite complex.

A limited company is a separate legal entity.

Two or more family members who operate a business as a Partnership and share the profits may be insurable as self-employed contributors at PRSI Class S, provided each has a reckonable income of at least €5,000 a year from all reckonable sources.

The following points should be noted:

• the Partnership must be genuine and supported by appropriate documentary evidence such as, the existence of joint business accounts with banks etc. There should also be evidence that business activities are in joint names including invoices, mart, creamery accounts, cash and carry accounts, farm grant applications, herd numbers, business insurance policies, etc.
• the most important indicator of the existence of a business partnership is the sharing of profits (or losses). Income Tax returns of each partner showing their shares of the profits should be available. In the case of married couples making income tax returns under joint or separate assessment, the income of each must be shown

Note: PRSI contributions are calculated on the basis of income details contained in Income Tax returns.

If you are unsure of your social insurance position, you may write to and request a formal decision from:

This process involves, firstly an investigation into the terms and conditions of the employment, which is followed by a formal decision made by a Deciding Officer under Social Welfare legislation.

If you are dissatisfied with the decision made by a Deciding Officer, there is a right of appeal (within 21 days) to:

• Class A - All social insurance benefits and pensions
• Class S - Adoptive Benefit, Benefit for 65 Year Olds, Carer’s Benefit (from 1 January 2025), Guardian's Payment Contributory, Invalidity Pension, Jobseeker’s Benefit Self-Employed, Maternity Benefit, Parent’s Benefit, Partial Capacity Benefit, Paternity Benefit, State Pension Contributory, Treatment Benefit and Widow's, Widower's or Surviving Civil Partner's Contributory Pension
• Class J - Occupational Injuries Benefit only
• Class M - In certain circumstances Occupational Injuries Benefits may be payable

If you are uncertain about any part of this guide or require further information, please contact:

Your local Intreo Centre or Social Welfare Branch Office and your local Citizens Information Centre are available to help with general enquiries.