BIK Annual Payments

BENEFIT IN KIND - ANNUAL PAYMENTS

IT IS IMPORTANT TO READ THE FOLLOWING NOTES CAREFULLY BEFORE PROCEEDING.

BENEFIT IN KIND ON ANNUAL PAYMENTS

Medical Insurance

In the case of medical insurance premiums, the cost to the employer is based on the Gross invoiced premium before TRS (Tax Relief at Source).  The employer refunds the TRS to Revenue.

Accommodation

Where accommodation is owned and provided by the employer for use by an employee, the value of the taxable benefit is subject to PAYE, USC & PRSI.

EXEMPT ANNUAL BENEFITS

In the case of subscriptions paid on behalf of an employee, it is the expense incurred by the employer less any reimbursement by the employee that is taken into account for PAYE, USC & PRSI purposes.

Sports Facilities

Where sports facilities are made available on the employers premises for the use of employees generally, a taxable benefit does NOT arise.  The facility must be available to ALL employees.

Employee required to live on premises

A taxable benefit will NOT arise where an employee (not director) is required by terms of his or her employment to live in accommodation provided by the employer in part of the employers business premises so that the employee can properly perform his or her duties, i.e. night care staff, governors, chaplains in prisons, caretakers etc.

BENEFIT IN KIND ON ANNUAL PAYMENTS

To access this utility go to Employees > Update employee benefits > Select "Annual"

This section should be used for annual payments such as medical insurance, accommodation, sports memberships etc. paid by the employer on behalf of the employee.

Ø   Enter Description of Annual benefit i.e. Medical insurance (VHI), accommodation

Ø   Enter Cost (this year) to Employer

Input the annual cost of benefit. If the benefit is only for part of the tax year, input the annual cost of the benefit and the start and end dates will make the appropriate adjustments

Ø   Enter Employee Contribution if any

Ø   If annual payment is for medical insurance - tick the box provided to indicate this.

Ø   Enter Start Date and End Date

If the benefit continues to the end of the tax year, it is not necessary to enter an end date.

Ø   Click Update file & show calculation of Notional Pay

The Notional Pay will be added to the employee's Gross Income each pay period to ensure that the correct PAYE, USC and PRSI are charged.

SUBSEQUENT ANNUAL PAYMENTS

*Please note: The original annual payment should NOT be removed. Simply enter the end date of the original payment and start the new payment in the section provided.

Ø   Enter Description of the new annual benefit i.e. Medical insurance (VHI), accommodation

Ø   Enter Cost (this year) to Employer

Input the annual cost of the benefit. If the benefit is only for part of the tax year, input the annual cost of the benefit and the start and end dates will make the appropriate adjustments

Ø   Enter Employee Contribution if any

Ø   If annual payment is for medical insurance - tick the box provided to indicate this.

Ø   Enter Start Date and End Date

If the benefit continues to the end of the tax year, it is not necessary to enter an end date.

Ø   Click Update file & show calculation of Notional Pay

The Notional Pay will be added to the employee's Gross Income each pay period to ensure that the correct PAYE, USC and PRSI are charged.

EMPLOYER CONTRIBUTIONS TO A PRSA

An employer may make contributions on behalf of an employee to a PRSA. The employers contributions will be treated as a Benefit in Kind in the employees hands. However the employee will be entitled to income tax relief (subject to the overall age related limit) in respect of such contributions.

In practice this means that a Benefit in Kind charge will only rise where the combined contribution (employer and employees) exceeds the age related exemption (shown below). This is unlikely to occur in most cases.

Where the combined contribution (employer and employees) exceeds the age related exemption it is subject to Benefit in Kind but it is not dealt with through the PAYE system. Employers will be required on request by the Revenue Commissioners to return particulars of PRSA contributions on behalf of employees on the form P11 D. In addition employees will also be obliged to make a return of such contributions on their own individual returns of income (Form 12).

Employer contributions to PRSA's are subject to the Universal Social Charge payable by the employee.