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Are your wages calculated correctly? Could you be paying too much tax and prsi? Part 1 |
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Written by Nilsson Denver
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Friday, 04 July 2008 21:50 |
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As an employee, each week tax is taken from your pay and you just accept it. As an employer, you pay employers prsi and you just accept it. But is what you are paying calculated correctly and did you know that sometimes an increase in pay actually means you take less home? Here is how your pay is made up | | 1 | Pension paid by Employer | | | 2 | Employer PRSI | | | | | | + | 3 | Benefit in Kind (BIK) | | + | 4 | Gross Salary | | - | 5 | Pension paid by employee | | = | 6 | Taxable Gross Pay (3+4+5) | | - | 7 | Income Tax | | - | 8 | Employee Prsi | | = | 9 | Net Pay after tax and prsi | | ADD | 10 | Non Taxable items | | + | 11 | Travel Pass | | + | 12 | Subsistence | | + | 13 | Mileage allowance | | LESS | 14 | Other deductions | | - | 15 | Credit union deductions | | - | 16 | Income protection schemes | | = | 17 | Net pay left to spend | In calculating all these amounts we need to understand the effects on your pay of
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Pensions paid by employer (PRSA, company schemes) -
Benefit in Kind (Company Cars, VHI paid by employer) -
Pensions paid by the employee (PRSA, company schemes) -
What is the significance of Taxable Gross Pay -
How income tax is calculated using tax credits and cut off rates -
How PRSI is calculated and how important it is to be on the correct rate -
How if you change to a different prsi rate you could take home less money -
What is a non taxable item -
What is the effect of other deductions
In the articles to follow each of these items will be explained So at the end you know how your net pay was calculated and maybe find some ways of increasing the money in your pocket. Article no.100007
copyright nilsson denver (2007) |
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Last Updated on Friday, 04 July 2008 22:09 |
