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Refundable Versus Allowable Expenses

So its your first time contracting and you are been told you can claim back expenses. What does this mean?

There are two types of expenses that can be claimed:

Refundable Expenses

These are expenses that are refunded directly by your client/agency. They may be expenses that you have incurred on behalf of the client and are directly refunded back to you. Icon will invoice the client for the expenses and show them as an additional tax free refund in your corresponding payslip. You will need to give Icon a copy of the receipts relating to such expenses.

Allowable Expenses

An allowable expense is a business expense incurred, by the contractor but not refunded by your client. How it is processed is that it is used to reduce the taxable element of your salary and then refunded to you tax free.

Example:
Gross Income €6000
Refundable Expenses €200
Taxable Salary €6000
PAYE/USC/PRSI €1500
Net Pay €4500
+
Refund Expenses €400
Net Pay to contractor €4900
Example:
Gross Income €6000
Allowable Expenses €400
Taxable Salary €5600
PAYE/USC/PRSI €1500
Net Pay €4100
+
Allow Expenses €400
Net Pay €4500

The expense must be receipted, and must comply with Revenue guidelines and be wholly and necessarily incurred for the purposes of the contract.