Did you receive an Income Tax refund in 2024?

Many of our clients received refunds for various reasons in 2024.
The most common causes were:

• Making extraordinary personal contributions to a PRSA.
• A significant illness requiring expensive medical care.
• A change in personal circumstances – marriage; taking a mortgage
  for the first time; redundancy.
• Being out of work for a period or taking leave of absence.

If any of the above apply to you, please contact us now to complete your Income Tax Return for 2024, and we will get you your refund now – there is no need to wait until October or November.

Are you, or any of your employees now 66 or
will reach 66 in 2025?

Upon reaching 66, an employee (or director) is no longer subject to employee PRSI.
This will increase a person’s take home pay by 4.1%. Please contact us or your payroll provider to inform them of this – it’s a simple matter of changing the PRSI class on the payroll software. If you did reach 66 during 2024, and were not aware of this, please contact us and we can assist you in getting a refund of up to the previous 4 years.

Statutory Sick Pay –
Increase deferred! Hooray

Last year the obligation on employers to pay up to 5 days sick pay was introduced.
This was due to increase to 7 days from 1st January 2025. However, the Government is currently reviewing the impact of statutory sick leave before deciding on any further increases for 2025 and 2026. Hopefully common sense will prevail and this will be capped at 5 days.

Considering deferring your state pension – here’s what you need to know

From 1st January 2024, a person may elect to defer the drawdown of the state pension
up to 70 years of age. In order to qualify you must have been born on or after
1st January 1958.

Why would a person do that:

• You will receive a higher pension.
• If you are currently still in employment it may mean that if you wait until you are no longer earning a salary, that you may only pay 20% PAYE for example instead of potentially 40% PAYE.
• If you currently don’t have enough stamps/contributions (520/10 years contributions)
  to qualify for the full state pension, by deferring, you may qualify for the larger amount.

The figures

It’s finally coming –
pension auto-enrollment

While speaking of budgets, after many false starts, the Government has stated this
will come into law on the 30th of September next. This is yet another increase in costs for
all employers and will hurt the sectors that employ a lot of people on the minimum wage especially.

Auto-enrollment will apply as follows:

• If you are aged between 23 and 60.
• Earn more than €20,000 p.a.
• Not currently be paying into a work or private pension through payroll.

The State will add €1 for every €3 an employee contributes.

The employer will have to contribute as follows:

Years 1 – 3 1.5% of gross pay Years 4 – 6 3% of gross pay Years 7 – 9 4.5% of gross pay
Years 10 and after 6%

This is a significant cost increase for all employers.

What’s the plan for 2025?

We are now well into 2025, and from what we and our clients are seeing the economy is still strong with good consumer demand, and plenty of money in circulation. Yes, there are challenges such as the shortage of labour, rising labour and energy costs and other input costs but overall it is still a buoyant economy.

We recommend all of our clients to prepare and write down a budget – it’s amazing what it will identify as areas of potential growth and opportunities but also serve to identify where there may be weaknesses or exposures in your business. If you think you would benefit from assistance in preparing these budgets, please just contact your accountant here in Guardian.