1. CUMULATIVE TAX SYSTEM The purpose of the PAYE system is to ensure that an employee's tax liability is spread out evenly over the year. To ensure that this is achieved, PAYE is normally calculated on a cumulative basis 1

2. Employer duty - Tax When employee commences work, employer notifies Inspector of Taxes and applies for a TDC Employer duty to ensure they have either a TAX DEDUCTION CARD P13/P14 2

3. Methods of Tax deduction PAYE tax deductions are calculated using one of the following methods: 1. Emergency Basis Emergency Basis 2. Temporary Basis Temporary Basis 3. Cumulative Basis Cumulative Basis 4. Non-Cumulative Basis (Week 1/Month 1 Basis) Non-Cumulative Basis (Week 1/Month 1 Basis) 3

4. Cumulative The tax to be deducted in a particular week or month is the cumulative tax due from 1 January to that date, reduced by the amount of tax previously deducted. The cumulative system operates for both tax credits and standard rate cut-off points. Any tax credits and/or standard rate cut-off point, which are not used in a pay period, are carried forward to the next pay period within that tax year. 4

5. Manual Replaced with electronic 5

6. Electronic TDC 6

7. Click http://www.revenue.ie/en/business/paye/e-tax- deduction-card.htmlhttp://www.revenue.ie/en/business/paye/e-tax- deduction-card.html Select the appropriate TDC link Complete the Employee’s details Upon entering the Tax Credits and Cut-Off Point from the Tax Credit Certificate, Select the 'Calculate' button The TDC can be saved on your PC 7