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Distinguish between the following taxation forms: Form P45 and Form P60 - Leaving Cert Business - Question 1 - 2009
Question 1
Distinguish between the following taxation forms: Form P45 and Form P60. (a) Form P45 is: (b) Form P60 is:
Worked Solution & Example Answer:Distinguish between the following taxation forms: Form P45 and Form P60 - Leaving Cert Business - Question 1 - 2009
Step 1
Form P45 is:
Answer
Form P45 is a document issued by an employer to an employee upon the cessation of employment. It provides critical details regarding the employee's Gross Pay, Tax, and PRSI contributions up to the date of leaving their job. The new employer will require the P45 to accurately assess the correct amount of tax payable for the new employment and if the individual is entitled to claim social welfare benefits or a tax refund.
Step 2
Form P60 is:
Answer
Form P60 is a year-end certificate issued by an employer to an employee after the end of the financial or tax year. This document summarizes the total Gross Pay, Income Tax, and PRSI contributions deducted during the specified financial year. The Form P60 is required by the employee when claiming a refund on overpaid tax against Tax Credits, checking PRSI contributions overpaid, and seeking refunds for Health contributions when income fell below the relevant threshold.