Preliminary Tax

For Income Tax (IT) purposes, preliminary tax is your estimate of the IT, Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) that you expect to pay for a tax year. You must pay this by 31 October of the tax year in question. 

If you wish to pay preliminary tax, you must use a VISA or MasterCard credit or debit card

Preliminary tax is calculated by paying either:

• 90% of the tax due for that year
• 100% of the tax due for the preceding year
• 105% of the tax due for the pre-preceding year (this option only applies where you pay by direct debit - it does not apply if you had no tax due for the pre-preceding year)

For example – Margaret has a tax bill of:

• €2,000 in year one
• €3,000 in year two
• €4,000 in year three

When filing her tax return for year two (i.e. by 31 October of year three), she must choose the amount of preliminary tax she is going to pay in respect of year three.

She can choose either:

• €3,600 (90% of the tax due for that year, i.e. year three)
• €3,000 (100% of the tax due for the previous year, i.e. year two)
• €2,100 (105% of the tax due for the pre-preceding year, i.e. year one)

When Margaret is filing her tax return for year three (i.e. by 31 October of year four) she will calculate her tax bill for the year. If the preliminary tax she paid in year three is less than the amount of her tax bill, she will have to pay the balance. However, if it is more than this figure, she will be entitled to a refund.