Your Payslip is an important, confidential document which is essential for your financial planning. Employees in both private and public sector employment in Ireland receive payslips in paper form or electronically – online payslip. All employees are entitled to receive a payslip which lists their gross pay and deductions. However, public sector payslips can be quite confusing because of the numerous acronyms and deductions. Public sector employees are members of the public sector superannuation scheme based on when they entered employment for the public sector. Therefore, they get deductions from their wage towards membership of the scheme. Furthermore, there are three different public sector schemes with difference in the contributions paid my members.
We find that a financial review with a public sector employee always starts with an explanation of the fields on their payslip. Often, employees are not familiar with what they pay for and how. However, it is important to fully understand your payslip, so that you can ensure you are being paid correctly. You can find on your payslip if you are on the right pay scale and contributing to the correct pension scheme, especially if you move employment.
Hence, in this blog post, we will explain a typical public sector payslip (Figure 1). Payslips in the different areas of the public sector may differ in layout, but they contain similar elements which are listed in Figure 1. – personal pay details, payments on the left, deductions on the right and cumulatives (year-to-date) at the bottom.
Figure 1. Public Service Payslip Fields
Payslip Public Service Ireland
1. Personal Pay Details on Payslip
The first section of your payslip contains your personal information – name, PPS number, position, pay scale and address. It is important to check that you are on the right pay scale and that this changes every year that you remain in employment in the public sector. In this section, you will see the pay period. Pay periods for public sector employees can vary – weekly, fortnightly or monthly- but fortnightly is quite common.
2. Payments on Payslip
Payments are listed on the left side and include all your gross earnings before any deductions. Some employees such as nurses, teachers, etc. will also be eligible to receive allowances. These will be listed under your Payments.
3. Deductions on Payslip
Deductions are all things that are subtracted from your Payments before you receive your Net Pay in your bank account. This is where things get quite complicated as there can be quite a few deductions. The ones that are present on every payslip are the USC, PRSI and PAYE, so we will start with them.
3.1. USC
USC stands for Universal Social Charge. USC is a tax on your gross income. You pay the USC if your gross income is more than €13,000 per year. Once your income is over this limit, you pay the relevant rate of USC on all of your income.
Rate of USC Year 2021
0.5% First €12,012
2% Next €8,472
4.5% Next €49,560
8% Balance
3.2. PAYE
Most employees pay tax through the PAYE (Pay As You Earn) system. This means that your employer deducts the tax you owe directly from your wages, and pays this tax directly to Revenue.
The amount of tax that you have to pay depends on the amount of the income that you earn and on your personal circumstances. There are a range of income tax reliefs available that can reduce the amount of tax that you have to pay. Visit www.revenue.ie
For example, for a single person, the standard cut off point is €35,300. This means that any earnings up to that amount are taxed at 20%, anything over that is taxed at 40%. However, tax credits reduce the actual amount of tax paid, i.e. single person personal tax credit of €1,650 and employee tax credit of €1,650.
Maybe give an example.
3.3. PRSI
Most employers and employees (over 16 years of age and under 66) pay social insurance (PRSI) contributions into the national Social Insurance Fund. Employees in the Irish Public Sector pay Class A or Class D PRSI.
Generally, employees who joined public service before April 1995, are on the Class D PRSI paid at 1.09%. This rate of PRSI provides limited social insurance benefits, and no entitlement to the Contributory State Pension.
Public Sector employees who joined after April 1995 are on the Class A PRSI paid at 4%. These employees are entitled to all social insurance benefits, i.e. unemployment benefit, sick benefit, state pension, etc.
3.4. Pension Contributions
The pension arrangement you are part of is a defined benefit. A defined benefit scheme promises a specific income from when you retire until you die. In exchange, you pay contributions each time you get paid. The contributions you pay are based on what pension scheme you are in.
Pre April 6th 1995 Entrants
1.5% Gross to Spouse and Children pension = ½ of pension passes to your spouse on death and
5% of Gross Pay as Pension contribution
6th April 1995 – 31st March 2004 Entrants
1.5% Gross to Spouse and Children pension = ½ of pension passes to your spouse on death and 50% is divided between your children. 25% if you have only one child.
1.5% Gross Pay goes to your Tax-Free Lump Sum
3.5% Net remuneration (salary – 2CSP) goes to your pension.
*Tax free lump sum and pension may appear separately or ‘grouped’*
1st April 2004 – 31st December 2012 Entrants
1.5% Gross to Spouse and Children pension = ½ of pension passes to your spouse on death and 50% is divided between your children. 25% if you have only one child.
1.5% Gross Pay goes to your Tax-Free Lump Sum
3.5% Net remuneration (salary – 2CSP) goes to your pension.
*Tax free lump sum and pension may appear separately or ‘grouped’*
1st January 2013 Entrants
*Career Averaging Scheme:
Sch 1: 3.5% (full salary – 2CSP)
Sch2: 3% of full salary
3.5. ASC
Those who started before 2013 :
The first €34,500 you earn in a year is ignored and the balance is multiplied by 10% to calculate your ASC charge
Those who started on 1st January 2013 and after:
The first €34,500 you earn in a year is ignored and the balance is multiplied by 3.333% to calculate your ASC charge.
ASC is essentially a pension levy, you do not receive any monetary value into your pension by paying ASC.
3.6. Payroll Deductions
Payroll deductions stands for all other deductions coming directly from payroll before your wage hits your bank account. These are payments you have opted to pay via payroll deductions, such as AVC contributions, Credit Union savings, Union membership fees, Salary protection, etc.
4. Cumulatives
This is a section usually at the bottom of your payslip which provided the year-to-date calculations of all your payments, deductions and tax credits.
Article contributed by Leah McMahon, Financial Advisor at MadeSimple at IPS Financial Advice
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