Nov 2017
16
As the long dark evenings set in and Halloween is over, the build up to the most wonderful time of the year will begin again! At this time of the year a significant amount of employers pay-out a Christmas/annual bonus and no matter how little or large the bonus is, a large portion ends up being paid over to the Revenue if it is put through the payroll as a taxable addition.
For example, if an employee’s salary is €35,000 per annum and they receive a bonus of €1,000 at Christmas, this employee would only receive around half of this amount after tax, employee PRSI and USC. The company would also be liable to pay 10.75% employer PRSI on the bonus, so in addition to giving the bonus of €1,000 there is also the extra €107.50 meaning the bonus is in fact costing the company €1,107.50.
The Solution
Revenue allow one small non-cash benefit per employee per annum up to the value of €500, PAYE, PRSI OR USC do not need to be applied to the benefit. A gift card or voucher seems to be the most popular way of allowing this payment to be made to the employee. The most popular gift card would seem to be One4All gift cards. Thesaurus Payroll Manager offers unique integration with One4All allowing employers to purchase gift cards quickly and easily for their employees. The integration offers a range of benefits, including:
Please note, where a benefit exceeds €500 in value, the entire amount will be subject to PAYE, PRSI and USC.
Purchasing gift cards through Thesaurus Payroll Manager is both simple and straightforward. To order, simply click on the Gift Card option at the top right hand side of the screen, fill in your company details, select the amount for each employee's gift card and click to proceed to the gift card website. The software will bring you to the gift card website where you will arrange payment and delivery details.
It is also possible to order Me2You gift cards through Thesaurus Payroll Manager, if required tick to order from Me2You.
For further details, click here.
Related Articles
Dec 2015
1
Are you due a week 53?
Employers are only due a week 53 if there are 53 pay dates in the tax year. This situation will arise for employers in 2015 where their pay date falls on a Thursday. This is due to the fact that their first pay date fell on Thursday 1st January and their last pay date falls on Thursday 31st December. Employers with any other pay date will not be due a week 53. The same principle applies for employers who run fortnightly payroll (they are only due a week 54 if there are 27 pay periods in the tax year).
Week 53 PAYE Deductions
Employers should apply employee’s tax credits and standard rate cut off points on a week 1 basis. This means employees will get the benefit of more than one year’s tax credits and cut off points. Where an employee is on an emergency basis then an emergency basis should continue to apply.
Week 53 USC Deduction
Employers should apply USC standard cut offs on a week 1 basis. This is a change from last year where there were no additional thresholds granted. If an employee is on an emergency basis then an emergency basis should continue to apply for week 53. If an employee is exempt from USC they will continue to be exempt in week 53.
Week 53 PRSI Deduction
There is no change to the way PRSI is calculated.
Dec 2014
17
Are you due a week 53?
Employers are only due a week 53 if there are 53 pay dates in the calendar year. This situation will arise for employers in 2014 where their pay date falls on a Wednesday. This is due to the fact that their first pay date fell on Wednesday 1st January and their last pay date falls on Wednesday 31st December. Employers with any other pay date will not be due a week 53. The same principle applies for employers who run fortnightly payroll (they are only due a week 27 if there are 27 pay periods in the calendar year).
Week 53 PAYE Deductions
Employers should apply employee’s tax credits and standard rate cut off points on a week 1 basis. This means employees will get the benefit of more than one year’s tax credits and cut off points. Where an employee is on an emergency basis then an emergency basis should continue to apply.
Week 53 USC Deduction
Where your employees operate on a cumulative basis continue to operate on a cumulative basis for week 53. For the purposes of USC there is no additional thresholds granted. If the employee has used all their USC cut offs in week 52 they will pay USC at the higher rate in week 53. Where your payroll operates on a week 1/month 1 basis employees will pay USC at the top rate. If an employee is on an emergency basis then an emergency basis should continue to apply for week 53. If an employee is exempt from USC they will continue to be exempt in week 53.
There is no change to the way PRSI is calculated.
Jul 2013
4
Mothers and pregnant women face losses of up to nearly €3,000 a year as part of the tax on maternity benefit which came into force on July 1st.
Women’s representatives said the measure was a mean-spirited move by the Government.
The tax will contribute €15m to the exchequer in 2013, and €40m per full year from then on.
But the National Women’s Council yesterday expressed concern that many women were not aware when the reductions in benefit would take affect.
Its policy advisor Ann Irwin explained: “It’s a very mean-spirited move in a lot of ways. Even the commission on taxation has said that maternity benefit should remain outside the tax net. It’s there for mothers to nurture children when outside the workforce.
“The benefit payments are an important acknowledgment for mothers of the cost of having a baby in Ireland.”
Opposition parties have branded the new tax measure as “anti-family” and it could see working mothers pay up to €2,700. Mothers will pay different rates depending on their top-up payments from their employer as well as assessments on their means.
The tax could see benefits reduced by up to €103 a week, the council said.
The Department of Social Protection paid out €309m in maternity benefit payments in 2011.
Mothers get between €217.80 and €260 a week in payments for 26 weeks.
The council said women who got employer top-up payments would be worst affected but that it remained unknown how many would be affected by the levy.
But ministers have insisted women overall will not be worse off. Some had been receiving high payments while on maternity leave, ministers have also said.
However, Ms Irwin said many women remained in the dark about the tax. “The first they may know about it while on leave is when their next pay package comes in.”
Bright Contracts – Employment Contracts and Handbooks
BrightPay – Payroll Software
Jun 2013
1
From 1st July 2013 Maternity Benefit, Adoptive Benefit & Health & Safety Benefit payable by the Department of Social Protection will be taxable in full. These payments will be taxable but will not be subject to USC or PRSI.
The Revenue Commissioners have confirmed that employees in receipt of Maternity Benefit, Adoptive Benefit or Health & Safety Benefit will have their tax credit and standard rate cut-off point reduced to reflect the benefit they have received. As the benefit will be taxed by Revenue and not at source the recipients will continue to receive the same payment from the Department of Social Protection.
Employers will be advised of the adjusted tax credits and standard rate cut-off points on the tax credit certificates (P2C’s). As the benefit will be taxed by reducing the employee’s tax credits and standard rate cut-off point, employers are NOT to include figures for the benefit on Revenue forms i.e. P45, P60 or P35L.
Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll Software
Feb 2013
5
Legislation aimed at protecting undocumented migrant workers is being progressed as a priority by the Department of Jobs, Enterprise and Innovation.
The proposed legislation will address, amongst other matters, an important legal issue identified in a recent High Court decision. In August 2012, the High Court overturned a Rights Commissioner's award of over €91,000 in favour of a foreign national employed as a restaurant worker.
The Court found that the employee’s contract of employment was substantively illegal in the absence of the appropriate employment permit and that he was therefore not entitled to the award.
The proposed legislation will protect migrant workers whose employment in Ireland is unlawful by reason of not having a work permit. The Department recently confirmed that it is expected that the Bill will be published in the first quarter of this year.
Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll Software
