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The short answer
Preliminary tax is your estimate of the Income Tax, PRSI and USC for the current year, and Revenue says it must be paid by 31 October of that year. In your first year as a self-assessed taxpayer Revenue says a payment may not be required, because the 100%-of-last-year test is usually nil. The catch comes a year later, when the balance for year one and the preliminary tax for year two fall due on the same date.
What preliminary tax is
Self-employed people in Ireland do not have tax taken from their income as they earn it. Instead, Revenue runs a system it calls Pay and File. On one date each year you file your return for the previous year, make a self-assessment for that year, pay the balance of tax for that year, and pay preliminary tax for the current year. Revenue describes preliminary tax as your estimate of the Income Tax, Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) for the year, and says it must be paid by 31 October of the tax year in question.
Revenue's guide to self-assessment gives the common date for the return as on or before 31 October in the year following the tax year: the 2025 return was due by 31 October 2026. Most people must file Form 11 online through ROS. Check Revenue's site each year for any later date it sets for people who both file and pay through ROS, rather than relying on last year's.
How much you must pay: the three tests
Revenue sets a minimum. Your preliminary tax must be at least the lowest of these three figures:
| Test | What it means | Conditions on Revenue's page |
|---|---|---|
| 90% of this year | 90% of the tax due for the current tax year | You are estimating a year that has not finished |
| 100% of last year | 100% of the tax due for the immediately previous tax year | Often the simplest, because the figure is already known |
| 105% of the year before last | 105% of the tax due for the tax year preceding the previous one | Only if you pay by direct debit; does not apply if that year's tax was nil |
If you pay less than the minimum, or pay late, Revenue says you may be charged interest, calculated for each day or part of a day after the deadline. Paying preliminary tax is therefore not optional once you are inside the system; the only choice is which test you use.
Your first year
Revenue says a payment of preliminary tax may not be required for the first year you are a self-assessed taxpayer. The reason is the 100% test: your liability as a self-assessed taxpayer for the previous year is normally nil, so 100% of nil is nil. Revenue also gives a second option: you can choose to pay 90% of your estimated tax for the current year, which reduces what you owe the following October.
If you have just started freelancing for clients in Lagos or Abuja, the first option often looks attractive because nothing leaves your account in year one. It is worth understanding what happens next before you choose it.
The second-year bill, worked through
Example. Chiamaka starts freelancing in Dublin in March 2026, designing apps for two Nigerian companies. Her registration takes effect for 2026. Suppose her 2026 Income Tax, PRSI and USC on the business come to €6,000, and she expects 2027 to be similar.
- By 31 October 2026: preliminary tax for 2026. Under the 100% test, her 2025 self-assessed liability was nil, so she pays nothing.
- By 31 October 2027: she files her 2026 return and pays the 2026 balance of €6,000, because nothing was paid on account.
- Also by 31 October 2027: preliminary tax for 2027. Under the 100% test, that is 100% of 2026, so €6,000. The 105% test cannot help, because her 2025 figure was nil.
- Total due on one date: €6,000 + €6,000 = €12,000.
If instead she had paid 90% of her estimated 2026 tax in October 2026 (90% of €6,000 = €5,400), her October 2027 payment would have been the €600 balance for 2026 plus €6,000 for 2027, so €6,600. The total tax is the same; what changes is when it leaves her account.
Planning for it
- Set aside a fixed share of every payment from a Nigerian client as it arrives, in a separate balance you do not spend.
- Decide early in the first year which test you will use. If income is rising fast, the 100% test keeps preliminary tax low, but leaves a larger balance later.
- If you choose the 105% test from year three, set up the direct debit through ROS, as Revenue requires; Revenue says the application is made online through the direct debit link on the ROS My Services screen.
- Revenue accepts payment through ROS or myAccount by bank account or card; its page says only Visa and Mastercard debit and credit cards are accepted.
- Convert naira income to euro for your records with one consistent method; see naira rates in Irish accounts.
If you have not yet registered, see registering as a sole trader with Form TR1, and for filing dates see the Form 11 deadline for freelancers.
Where Pryme fits
A Pryme Business Account holds euro and naira side by side, so fees paid in naira by a Nigerian client can stay in naira until you choose to convert with Swap, where the rate and the fee are shown before you approve. Some freelancers keep a separate euro balance as their tax pot. See business multicurrency accounts.
Questions people ask
Do I pay preliminary tax in my first year of self-employment in Ireland?
Revenue says a payment may not be required in your first year as a self-assessed taxpayer, because 100% of the previous year's liability is usually nil. You may choose to pay 90% of the current year's tax instead.
When is preliminary tax due?
By 31 October of the tax year it relates to, on the same date as the return and balance for the previous year. Check Revenue's site for any later date set for filing and paying through ROS.
What happens if I underpay preliminary tax?
Revenue says you may be charged interest, calculated for each day or part of a day past the deadline.
Can I use the 105% option in my second year?
Only if you pay by direct debit, and Revenue says it does not apply if the tax for the pre-preceding year was nil, which it usually is for a new trader.
Sources
- Revenue: Preliminary tax (published 15 Oct 2026) · accessed Oct 2026
- Revenue: Guide to self-assessment · accessed Oct 2026
- Revenue: Who should register for Income Tax self-assessment (published 15 Oct 2026) · accessed Oct 2026
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