Amy is an employee paying PRSI Class A. If she receives total investment income in a year of €2,000 gross, this income will be subject to which taxes?

• A. (i) only.
• B. (i) and (iii) only.
• C. (ii) and (iii) only.
• D. (i), (ii) and (iii).

Answer: (B)

Investment income earned by an employee is not subject to PRSI. PRSI is charged on earnings from employment, not on passive income like investment returns. The €2,000 of investment income would be included in the person’s total income for income tax and for Universal Social Charge (USC), so both income tax and USC apply. The amount of tax actually paid depends on total income, allowances, and USC bands, but PRSI does not apply to this investment income. That’s why the correct choice is the one that reflects income tax and USC only.