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What is Emergency Tax and Why Does it Happen Ireland 2025?
Understanding Irish emergency tax: the temporary high-rate tax code applied when Revenue lacks your details, why it happens in new jobs, and how it creates automatic refund entitlements.
Quick Answer
Emergency tax is temporary 40% income tax + 8% USC applied when Revenue does not have your tax details in new employment. Happens when starting jobs without P45, missing PPS number, or delayed Revenue registration. Usually self-corrects within 4-6 weeks with automatic refund through wages.
What is Emergency Tax?
Emergency tax is Ireland's failsafe tax code applied to new employees when Revenue does not have sufficient information to calculate correct tax deductions. It is a temporary tax code deliberately set at high rates to ensure Revenue collects tax upfront, with automatic correction and refund once proper details are received.
Emergency Tax Rates (2025)
- Income Tax: 40% on all income (vs. normal 20% on first €44,000)
- USC: 8% on all income (vs. tiered 0.5%-8% normally)
- PRSI: 4% (same as normal for employees)
- Total deduction: 52% of gross pay
Why Emergency Tax Happens: Common Triggers
1. Starting New Job Without P45
Most common trigger. When you start employment, employer requests your P45 from previous employer showing year-to-date income and tax paid. If you cannot provide P45 (first job of year, P45 lost, previous employer delayed), Revenue has no record of your tax situation for current year. Employer must apply emergency tax until Revenue updates records.
2. Missing or Incorrect PPS Number
Revenue identifies taxpayers via PPS number. New employers must register your employment with Revenue using your PPS. If PPS is missing, incorrect, or not registered with Revenue, tax system cannot allocate your tax credits. Emergency tax applies until PPS registration completed.
3. Tax Certificate Not Issued
Revenue issues Tax Credit Certificate to employers showing your credits and tax band. Certificate issue requires correct PPS, previous employment history, and up-to-date records. If certificate delayed (new PPS holders, recent immigrants, system delays), emergency tax applies during waiting period.
4. Starting Mid-Week
Some payroll systems apply emergency tax for any employee starting mid-week, reverting to correct tax code from following Monday once Revenue registration processed. This is payroll software limitation, not Revenue requirement.
How Emergency Tax Works
Emergency tax operates on "Week 1" basis, meaning:
- No cumulative tax calculation - each pay period treated independently
- No year-to-date income tracking until proper tax code applied
- 40% rate applied to ALL income (not just income above tax band threshold)
- 8% USC applied to ALL income (not tiered rates)
- Zero tax credits applied (vs. monthly €296 personal + €296 PAYE credit for single person)
Example: Emergency Tax Impact
Normal Tax (Correct Code)
Monthly gross: €3,000
Income tax: €200 (using credits + 20% rate)
USC: €120 (tiered rates)
PRSI: €120
Net pay: €2,560
Emergency Tax
Monthly gross: €3,000
Income tax: €1,200 (40% flat rate)
USC: €240 (8% flat rate)
PRSI: €120
Net pay: €1,440
Emergency tax costs €1,120 extra per month - but this is refunded!
How Long Does Emergency Tax Last?
Emergency tax is temporary, typically lasting:
- With P45 provided: 2-3 weeks until Revenue processes
- Without P45 but correct PPS: 4-6 weeks until tax certificate issued
- Missing/incorrect PPS: 6-12 weeks until PPS registered and certificate issued
- Recent immigrants: 8-16 weeks including PPS application time
Automatic Correction
Once Revenue issues correct tax certificate to your employer, emergency tax stops immediately. Your employer recalculates year-to-date tax, identifies overpayment, and refunds excess through your next wage payment. This happens automatically with no action required from you.
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Start Your Free Assessment →Why Emergency Tax Exists
Emergency tax serves multiple purposes in Irish tax system:
- Revenue Protection: Ensures tax collected upfront rather than risking underpayment if employee leaves before year-end
- Incentivizes Compliance: High rates motivate employees to provide correct documentation quickly
- Simplifies Payroll: Gives employers default code to use when awaiting Revenue guidance
- Prevents Fraud: Limits tax credit abuse by requiring Revenue verification before applying credits
Emergency Tax vs. Week 1 Basis
Many confuse emergency tax with "Week 1" tax basis. Key differences:
Emergency Tax
- ✓ 40% flat rate on all income
- ✓ 8% flat USC on all income
- ✓ Zero tax credits applied
- ✓ Week 1 non-cumulative basis
- ✓ Temporary until proper code issued
Week 1 Basis (Normal)
- ✓ Normal 20%/40% rates on appropriate bands
- ✓ Tiered USC rates
- ✓ Full tax credits applied
- ✓ Week 1 non-cumulative basis
- ✓ Lasts until switched to cumulative basis
What To Do If You Are on Emergency Tax
- Provide P45 Immediately: If you have P45 from previous job, give to new employer ASAP
- Verify PPS Number: Ensure employer has correct PPS and has registered your employment with Revenue
- Check myAccount: Log into MyTaxRebate.ie to verify employment registered and tax certificate issued
- Contact Revenue: If emergency tax lasts beyond 6 weeks with correct details provided, contact Revenue directly (emergency tax queries prioritized)
- Consider Professional Help: If emergency tax extends months, MyTaxRebate.ie can expedite Revenue processing and secure faster refunds
Key Points
- Emergency tax is temporary failsafe at 40% income tax + 8% USC when Revenue lacks your details
- Most common trigger: Starting new job without P45 from previous employer
- Duration: Typically 2-6 weeks, sometimes longer with PPS issues
- Automatic correction: Once Revenue issues tax certificate, employer refunds overpayment through wages
- Not employer fault: Employers must apply emergency tax until Revenue provides tax certificate
- Refund guaranteed: All emergency tax overpayment is refunded either through wages or year-end claim
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📅 Last Updated: January 15, 2025
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❓ Frequently Asked Questions
How far back can I claim a PAYE tax refund in Ireland?
You can claim PAYE tax refunds for the last 4 years. In 2025, you can claim back to 2021.
What is the average PAYE tax refund in Ireland?
Our clients receive an average refund of €1080+. Claims can be higher with multiple years.
How long does it take to get a PAYE refund?
Once Revenue approves your claim, refunds typically arrive within 3-5 working days.
Do I need receipts to claim a tax refund?
For most PAYE refunds (tax credits, flat rate expenses), no receipts are needed.
