Steps to take when changing a job

New Graduate

In Ireland, if you are changing your job, (that is, leaving your existing job and commencing a new one), there are a number of steps you should take in relation to tax and social insurance contributions (PRSI/PAYE). In addition, there are important issues to be aware of, regarding taking care of your pension scheme/s.

Statement of Tax

Whenever you leave a job you should get a form P45 from your employer. Your P45 form is a statement from your employer that contains important information. For example, it states the amount of pay you received to date, the amount of tax and social insurance (PRSI) you paid to date, the name of your last employer, etc. When you begin work at your new job, you will need this P45 form to give to your new employer. Your new employer then takes some details from your P45 and then sends your P45 form to the tax office on your behalf. This is to notify the tax office that you have now commenced working for a new employer and ensures that they are deducting tax appropriately. When you give the P45 to your new employer, he/she will:

  1. Operate PAYE in accordance with the tax credits and standard cut off point details shown on the form P45 until he/she receives a tax credit certificate from the tax office.
  2. Notify the tax office that you have changed jobs so that a tax credit certificate can be issued for your new job.

If you do not give your new employer a form P45, emergency tax will be deducted.

Emergency Tax

If your employer has not received either a:

  1. Certificate of tax credits from the tax office
  2. Form P45 (parts 2 and 3) from you, in respect of your previous employment

Your employer will be obliged to deduct tax on an emergency basis when paying your employee's wages or salary. This means that they will give you a temporary tax credit for the first month of employment but tax deductions are increased progressively from the second month onwards. The effect of emergency basis is that after 4 weeks, no tax credits are given and tax is paid at the higher rate from week 9, regardless of the level of pay. It makes sense therefore to avoid the emergency basis by following the simple steps outlined earlier when you start work in Ireland. Details of emergency tax rates are in the Revenue leaflet PAYE Notice to Employers (pdf)

Read more information about tax and starting work here.