Operational Guidelines: PRSI for the Self-Employed

Definition

All self-employed persons aged between 16 and 66 years of 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), with reckonable income or emoluments of €5,000 or more per year, are liable for compulsory insurance at Class S.

The vast majority of self-employed people will return their income to the Revenue Commissioners under the self assessment system. However, certain categories of self-employed will pay their PRSI through the PAYE system or directly to the Department of Employment Affairs and Social Protection.

The legislation dealing with the self-employed is:

• chapter 3 of Part II of the Social Welfare Consolidation Act 2005 (as amended), and
• chapter 2 of Part II of the Social Welfare (Consolidated Contributions and Insurability) Regulations, 1996 (S.I. 312 of 1996) (as amended)

An information leaflet, Guide to PRSI for the Self-Employed - SW 74 is also available at the below link.

Administration

PRSI for the self-employed is administered by:-

Persons classified as self-employed

PRSI Class S is paid by self-employed people such as:

• professional people (for example doctors, dentists, solicitors etc)
• sole traders, people in business on their own or in partnership, farmers, religious, contractors, sub-contractors
• people with income from investments, rents or maintenance payments
• employees who are also self-employed in a trade or profession
• company directors, and others, who pay their tax through the PAYE system but who are not regarded as employees for social insurance purposes
• certain artists, woodland owners, stallion fees and childminders who have been made exempt from income tax by the Revenue Commissioners
• spouses or civil partners of self-employed contributors who participate in the business
• Local Authority members (City and County Councillors) with reckonable emoluments from their Local Authority positions

Persons excluded

Certain categories of persons are excluded from paying Class S. The legislation covering this is Part III of the First Schedule of the Social Welfare (Consolidation) Act, 2005.

The following are some examples:

• relatives of the self-employed (other than spouses or civil partners) who help out in the running of the business, but who are not business partners. Clarification of a persons insurable status should be sought from Scope Section, Áras Mhic Dhiarmada, Store Street, Dublin 1, D01 WY03, Ph (01) 704 3000
• Persons with reckonable annual income of less than €5,000
• Persons who pay contributions at Class A and whose only self-employed income is unearned income such as interest or rent **
• Persons in receipt of an Occupational pension (pension from previous employment) whose only self-employed income is unearned income such as interest or rent
• Public servants paying Class B, C or D who are also self-employed *
• Persons not ordinarily resident in the State with solely unearned income

Benefits

PRSI at Class S provides cover for:

• Adoptive Benefit
• Benefit Payment for 65 year olds
• 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
• Widow’s, Widower’s or Surviving Civil Partner’s Contributory Pension.

Current legislation requires that all Class S contributions must be paid in full prior to the award of contributory pensions.

Rates of contribution

(*) For those returning PRSI through the Revenue self-assessed system, a blended or proportionate rate of 4.025% or a minimum payment of €537.50 will apply on their self-employed 2024 annual income (for 2025 income the rate will be 4.125% or min payment of €650) due to the change of rate during that year

When the full amount (100%) of income tax and PRSI charged has been paid, an annual complement of 52 Class S contributions are awarded. Where less than the full amount due has been paid, no contributions are awarded.

Categories not covered by self-assessment

Company Directors

If a person is a self-employed company director their PRSI is deducted by the employer under the PAYE system. Although the PRSI of a company director is deducted by the employer it is the responsibility of each company director to ensure that the correct amount of PRSI has been deducted and remitted to the Revenue Commissioners.

No Net Liability (NNL) cases

A person who has been told by an Inspector of Taxes that they need not make a tax return, who has self-employed income of €5,000 or more per year, is liable to pay a flat rate self-employed PRSI contribution to this Department.

Examples of reckonable income

Reckonable income includes income from the following sources:

• income from a trade or profession
• benefit in kind
• interest, annuities and income from foreign investments
• rent from any property in Ireland
• income from which tax has been deducted at source such as annuities, bank interest, or building society interest, maintenance payments and other miscellaneous sources of income not included in the above
• income from share dividends/options. For the 2011 year only, if the share options were the subject of a written agreement entered into before 1 January 2011, the charge to PRSI will not apply

What is excluded from reckonable income

The following types of income are excluded from reckonable income and do not have to be taken into account when calculating the PRSI contribution:

• capital allowances
• any sums received by way of benefit, pensions, allowance or supplement from the Department of Employment Affairs and Social Protection
• Infectious Diseases Maintenance Allowances or Mobility Allowances paid by the Health Service Executive
• occupational pensions
• any payment received by Public Office Holders. These payments are subject to Class K
• income continuance payments that have been approved by Revenue and are received by a person forced to leave employment due to illness
• redundancy payments, golden handshake payments and early retirement bonus
• certain retirement lump sums in excess of €200,000 which are subject to income tax (also excepted emoluments)
• the early encashment of certain amounts of private pensions which are subject to income tax by individuals in the public sector who had previously been self-employed

Scheme for persons engaged in share fishing (Class P)

A share fisherman, or woman, who is classed as self-employed, may choose to pay an additional PRSI contribution at Class P. This contribution provides cover beyond normal Class S PRSI benefits, as follows:

• limited Illness Benefit (up to 52 weeks)

The minimum annual contribution for Class P is €200 or 4.1% until 30 September 2025 (4.2% from 1 October 2025) of all income in excess of €2,500 whichever is greater, subject to the income ceiling applied to self employed contributors. This contribution is additional to the normal Class S payment made by the contributor. In order to remain a Class P contributor a person must continue to be liable for Class S PRSI and ensure that all payments due are up to date.

Registration

A person, other than a company director, who becomes self-employed must register with the Revenue Commissioners. They should contact their local tax office which will register them under the self assessment system for tax, USC and PRSI.

Where there is doubt with regard to a person's insurability status the case should be referred to Scope Section (01) 704 3000 of this Department for formal determination.

Voluntary Contributions

Self employed persons who are not liable to pay PRSI in any year may, subject to meeting certain conditions, be eligible to become a voluntary contributor. See voluntary contributions for full details.

Where to get more information

For more information on PRSI for the self-employed, contact your local Intreo Centre, your local Branch Office or Client Eligibility Services at:

See also information booklet SW 74