Employing family members and PRSI

Most employees are liable to pay PRSI. Exceptions to this general rule apply in the case of certain family employment. This term is used to describe a situation in which a self-employed sole trader either employs, or is assisted in the running of the business by a spouse, civil partner or other family member(s). If the business does not operate on a sole trader basis – for example if it is a Limited Company or a Partnership – it is not family employment.

The following categories of family employment are insurable under the social insurance system in exactly the same way as employments that have no family connection:

If you are employed as an employee by a prescribed relative and the employment is not related to a private dwelling house or a farm in or on which both you and the employer reside (PRSI Class A or Class J applies). If you are employed as an Apprentice by a prescribed relative (even if the apprenticeship employment does relate to a private dwelling house or a farm in or on which both you and the employer resides) there must be a registered Contract of Apprenticeship involved (PRSI Class A or Class J applies).

A prescribed relative is a parent, grandparent, stepparent, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother, or half-sister.

The following categories of family employment are the exceptions that are not covered by the social insurance system:

• If you are employed as an employee by your spouse or civil partner
• If you are employed as an employee by a prescribed relative and the family employment relates to a private dwelling house or a farm in or on which both you and the employer reside
• If you assist or participate in the running of the family business but not as an employee. (For example, a son/daughter who is attending full-time education who participates in the business (e.g. farm) after school hours or a spouse/civil partner who carries out book-keeping work for the business – but is not an employee)

Points to note:
PRSI Class M is used to record situations in which there is no liability to social insurance.

Subject to certain conditions, if you cease to be covered by compulsory PRSI you may opt to become insured on a voluntary basis and pay voluntary contributions.