What is preliminary tax in Ireland and when do you pay it?

Preliminary tax is an advance payment of your income tax, USC, and PRSI liability for the current tax year, paid alongside the filing of the previous year's return. It is a feature of Ireland's self-assessment system and applies to all self-assessed taxpayers.

When is preliminary tax due?

Preliminary tax for the current year is due by 31 October of that same year. For ROS (Revenue Online Service) filers who pay online, the deadline is typically extended to mid-November (usually around 14 November). For example, your 2024 preliminary tax was due in October 2024, paid at the same time you filed your 2023 Form 11.

How much must you pay?

You must pay the higher of these three amounts:

• 90% of your final tax liability for the current year (requires you to estimate your current year income accurately)
• 100% of your prior year's tax liability (safest and most common approach — pay what you paid last year)
• 105% of your pre-preceding year's liability, but only if you pay by direct debit

If you underpay preliminary tax by more than 20% of the final liability, Revenue charges interest at 0.0219% per day on the shortfall from the due date.

Why does preliminary tax matter?

Preliminary tax is paid before you know your exact tax bill for the year — it is an estimate. The balance of tax (the difference between preliminary tax paid and the actual tax due) is then paid when you file the following year's return. Good cash flow planning is essential to avoid surprises.

First-year taxpayers: If this is your first year in self-assessment, you only need to pay 90% of your estimated current year liability (the 100%-of-prior-year option is not available in year one, as there was no prior year).