[Ireland] Revenue and tax implications of the ‘side hustle’

[Ireland] Revenue and tax implications of the ‘side hustle’
16 Sep 2022

As the cost of living crisis continues to batter bank accounts, a new phenomenon is becoming increasingly prominent: the ‘side hustle’. The practice of earning extra money doing something outside your regular job, Irish Examiner reports.

A side hustle can be anything from offering private tuition to childminding, cake baking, dog walking, sports coaching, becoming an influencer or consulting. Simply put it means utilising your skills or assets - like a spare room in your home or space on your driveway - to top up your income.

To determine your ideal side hustle, consider your skills and how you could apply them then use your network to tell people you’re available for extra work. In the longer term, doing a course is another way for people to upskill to make money in the future.

Earning extra money is undeniably a good thing but what are the implications with taxes and Revenue? Many people will be PAYE workers and won’t have to worry about calculating the tax on earnings, however, once you start to earn this additional income, you may have to start considering the tax implications.

Marian Ryan - Consumer Tax Manager with Taxback.com - told the Irish Examiner that if you are planning to earn some extra cash, depending on your PAYE income, more than half of it could well be going straight to the taxman.

Ms Ryan reportedly said that anyone earning less than €36,800 in PAYE income will pay 20 per cent income tax but further income could raise earnings to the point where you enter the higher rate tax bracket and, as such, will see you paying income tax at 40 per cent. You’ll also pay USC at a rate ranging from 0.5 per cent to 8 per cent, depending on the extent of your extra earnings.

Anyone making more than €5,000 in additional earnings is required to file a tax return using Form 11 by the self-assessed tax file deadline.

“Non-PAYE income is any income that someone earns outside of employment that their employer does not deduct PAYE, USC and PRSI at source for them. This can be anything from rental income, sole trader income, shares, dividends, Airbnb income. This list here is endless but basically, any income outside of employment is considered to be non-PAYE income,” Ms Ryan said.

All income is taxable and we are all liable to pay tax on every cent and euro we earn. However, the way it is taxed varies, as Ms Ryan emphasises.

“When you have non-PAYE income you would be what is called a 'chargeable person’ and that means you need to file an income tax return by the 31st of October each year to declare all of the income that you had in the previous year, the relevant expenses you had related to that income and pay the PAYE, PRSI and USC due on that income. If you do not pay and file your taxes due there are various penalties in place.” 

If the return is filed and the tax bill paid within two months of the deadline, a 5 per cent surcharge will be added to the tax bill, this increases to 10 per cent if it is any later than two months past the deadline.

The good news is that there are tax reliefs available on your extra income. "There is an almost endless list of different tax credits and expenses that people can claim.” 

In addition, there are many personal reliefs that everyone would be entitled to such as tax credits, medical expenses and working from home credits.


Source: Irish Examiner

(Quotes via original reporting)

As the cost of living crisis continues to batter bank accounts, a new phenomenon is becoming increasingly prominent: the ‘side hustle’. The practice of earning extra money doing something outside your regular job, Irish Examiner reports.

A side hustle can be anything from offering private tuition to childminding, cake baking, dog walking, sports coaching, becoming an influencer or consulting. Simply put it means utilising your skills or assets - like a spare room in your home or space on your driveway - to top up your income.

To determine your ideal side hustle, consider your skills and how you could apply them then use your network to tell people you’re available for extra work. In the longer term, doing a course is another way for people to upskill to make money in the future.

Earning extra money is undeniably a good thing but what are the implications with taxes and Revenue? Many people will be PAYE workers and won’t have to worry about calculating the tax on earnings, however, once you start to earn this additional income, you may have to start considering the tax implications.

Marian Ryan - Consumer Tax Manager with Taxback.com - told the Irish Examiner that if you are planning to earn some extra cash, depending on your PAYE income, more than half of it could well be going straight to the taxman.

Ms Ryan reportedly said that anyone earning less than €36,800 in PAYE income will pay 20 per cent income tax but further income could raise earnings to the point where you enter the higher rate tax bracket and, as such, will see you paying income tax at 40 per cent. You’ll also pay USC at a rate ranging from 0.5 per cent to 8 per cent, depending on the extent of your extra earnings.

Anyone making more than €5,000 in additional earnings is required to file a tax return using Form 11 by the self-assessed tax file deadline.

“Non-PAYE income is any income that someone earns outside of employment that their employer does not deduct PAYE, USC and PRSI at source for them. This can be anything from rental income, sole trader income, shares, dividends, Airbnb income. This list here is endless but basically, any income outside of employment is considered to be non-PAYE income,” Ms Ryan said.

All income is taxable and we are all liable to pay tax on every cent and euro we earn. However, the way it is taxed varies, as Ms Ryan emphasises.

“When you have non-PAYE income you would be what is called a 'chargeable person’ and that means you need to file an income tax return by the 31st of October each year to declare all of the income that you had in the previous year, the relevant expenses you had related to that income and pay the PAYE, PRSI and USC due on that income. If you do not pay and file your taxes due there are various penalties in place.” 

If the return is filed and the tax bill paid within two months of the deadline, a 5 per cent surcharge will be added to the tax bill, this increases to 10 per cent if it is any later than two months past the deadline.

The good news is that there are tax reliefs available on your extra income. "There is an almost endless list of different tax credits and expenses that people can claim.” 

In addition, there are many personal reliefs that everyone would be entitled to such as tax credits, medical expenses and working from home credits.


Source: Irish Examiner

(Quotes via original reporting)

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