Being self-employed offers freedom and flexibility, but it also means taking responsibility for your social insurance contributions. This guide explains everything you need to know about PRSI (Pay Related Social Insurance) in 2025, helping you understand your obligations and the valuable benefits you receive in return.
Who Needs to Pay Self-Employed PRSI?
You must pay PRSI if you:
- Earn €5,000 or more annually from self-employment
- Are aged 16 or over and under 66
- Work as a sole trader, freelancer, or contractor
- Are a partner in a business
- Earn income from rent, investments, or dividends
Understanding Self-Employed PRSI Rates 2025
- Current rate: 4.1% (until September 30, 2025)
- New rate: 4.2% (from October 1, 2025)
- Minimum annual payment: €650
- Payment method: Directly to Revenue with your tax return
Learn more about tax deadlines and payment options for self-employed individuals on our website.
Who Needs to Pay PRSI Class S?
Class S PRSI applies to:
- Taxi drivers, Farmers, doctors, dentists, solicitors
- Authors, artists, religious workers
- Contractors and sub-contractors
- Professionals in business on their own account
- People earning from investments or rents
- Employed people who also have self-employment income
- Local authority councillors
For specific industry guidelines, visit the Revenue’s self-employed section.
Who is Exempt from Paying Class S PRSI?
The following are exempt:
- Prescribed relatives helping in a family business (non-partners)
- People earning less than €5,000 annually
- Non-resident individuals with unearned income only
- Non-resident directors of Irish Companies
- Employees whose only other income is unearned
- Certain public servants with Class B or C PRSI
- Public office holders (may be liable for Class K instead)
Is PRSI Applicable to All Types of Income?
PRSI-eligible income includes:
- Benefit-in-kind
- Trade or profession income
- Interest and foreign investment income
- Irish rental income
- Pre-taxed income (annuities, bank interest)
- Share dividends and ARF dividends
- Certain employment income
Which Income Sources are Excluded from PRSI Calculations?
Excluded items:
- Capital allowances
- Social welfare payments
- SOLAS training payments
- HSE Mobility Allowance
- PAYE pension payments
- Revenue continuance payments
- Redundancy payments
- Early AVC withdrawals
- Certain retirement lump sums
- Foreign life assurance policy gains
- Offshore fund disposal gains
Why Should I Care About PRSI?
PRSI is your investment in social protection. It provides:
- Financial security during life changes
- Healthcare benefits
- Retirement income
- Protection for your family
What Social Benefits May I Get by Paying Class S PRSI?
Short-Term Benefits
- Maternity Benefit: €289 weekly (26 weeks)
- Paternity Benefit: €289 weekly (2 weeks)
- Parent’s Benefit: €289 weekly (7 weeks)
- Treatment Benefits:
- Dental care
- Eye examinations
- Hearing aids
- Regular health check-ups
Learn more about maximizing your PRSI benefits in our detailed guide.
Long-Term Security
- State Pension (Contributory): €289.30 weekly
- Invalidity Pension: €249.50 weekly
- Widow’s/Widower’s Pension
- Guardian’s Payment Contributory
- Adoptive Benefit
- Jobseeker’s Benefit for Self-employed
Real-Life Value Example
Let’s illustrate a real-life scenario of a self-employed taxi driver in Ireland preparing and submitting his tax returns for 2025, and discover the financial impact of not paying PRSI contributions.
Name: Tom
Occupation: Self-employed taxi driver
Net Income After Expenses: €4,800 (below the PRSI Class S contributions threshold)
PRSI Class S Contributions Threshold for 2025: €5,000
Tax Return Preparation:
Tom calculates his net income after deducting all allowable business expenses. His net income for 2025 is €4,800, which is below the PRSI Class S contributions threshold of €5,000. Therefore, Tom is not required to pay PRSI Class S contributions for this tax year.
PRSI Class S Contributions:
Threshold: €5,000 Minimum Annual Contribution: €650 (if income is above the threshold)
Benefits of Paying PRSI Class S Contributions:
If Tom decides to voluntarily pay the minimum PRSI Class S contribution of €650, he would be eligible for the social benefits. However, by not paying the PRSI Class S contributions, Tom is missing out on the following social benefits.
If Tom pays the minimum PRSI Class S contribution of €650 for the tax year 2025, it would be equivalent to approximately €54.16 per week (€650 / 12 months). This ensures he has 52 full-rate PRSI contributions for the year, making him eligible for various social benefits.
Check out our related article on pension planning for self-employed professionals.
How to Make the Most of Your PRSI
For New Self-Employed
- Register immediately with Revenue
- Budget for PRSI payments (see our budgeting tips for self-employed)
- Maintain accurate records
- Understand qualification periods
For Established Businesses
- Review contributions annually
- Monitor benefit eligibility
- Plan for retirement (read our retirement planning guide)
- Consider voluntary top-ups if needed
Final Thoughts
PRSI is more than just another payment – it’s your social insurance safety net. The benefits far outweigh the contributions, providing essential protection for you and your family. Stay informed about your contributions and rights to maximize your benefits.
Last updated: January 2025
Disclaimer: Rates and benefits are subject to change. Always verify current information with official sources.
Related Resources
- Complete Guide to Self-Employed Tax Returns
- Understanding USC for Self-Employed
- Self-Employed Health Insurance Guide
- Business Expense Guide for Self-Employed
External Resources
