Can anybody help me with understanding payslip?!

Hi
Can anybody please help me to understand my payslip? I have no idea what any of it means so any tips would be very welcome! My situation - am working part time, married and jointly assessed. I have been working just under a year for my current employer and in that time the "TAX" field of the payslip has always been 0.00. I don't understand why that is. Do I not have to pay 20% tax on the first part of my income no matter what?
Also I don't understand the pension fields - can anybody tell me which one of these relates to my own pension - or am I not paying any?
Those are my major questions. I am also trying to find out how it would affect me if I increase my hours (I'm currently working 50% of full time) so any tips on that would be appreciated.
Thank you in advance.
Louisa

PAYMENTS:
Salary: 1415.63
ER Pension: 283.13

TAX CREDIT: 3300
TAX CREDIT YTD: 2475
RSI : A0

DEDUCTIONS:
Accident Ins: 0.85
Pension Levy : 8.28
Pension : 0.00
Pension : 0.00
USC : 42.33
Pension : 42.47
Pension Full : 14.62

SUMMARY: THIS PERIOD : TO DATE
Gross Pay : 1415.63 : 12740.67
Pre-Tax Deds : 65.37 : 588.34
Taxable Gross : 1350.26 : 12152.33
Cut Off : 2733.33 : 24600.00
Tax : 0.00 : 0.00
PRSI : 0.00 : 0.00
Other Deds : 0.85 : 7.65
NET : 1307.08 : 11763.73

You can earn €16500 a year tax free with your tax credits.Any earnings over that amount get taxed at 20%.If you increase your hours significantly,you will pay 20% tax on earnings above 16.5k.(say if your annual pay came to 20.5k,you would pay 800 Euro in tax).
Your PRSI class may change from A0 to full PRSI (4%)

Thank you very much for the reply vandriver, that makes sense. The only part I don't understand is where you got the figure 16500 from? I know it is 3300 a month between my husband and I but I don't understand how that gets divided up between us. Sorry, I know these are really stupid questions.
Thank you again.

From your payslip,your tax credit is €3300.This is a yearly figure.If you take €16500 and apply the standard tax rate of 20% to it you get €3300 tax owed.But,you then deduct your tax credit to arrive at the amount of paye you owe for the year.So €16500 is what you can earn tax free.
The cut off mentioned is also known as SRCOP,and is the amount you can earn that will be taxed at the standard rate.
If your husband pays tax at the higher rate,you can reallocate some of your SRCOP to his income,to save tax.

Thanks again vandriver, I see what you mean with the 16.5k. My husband does earn more than me (luckily!) so I will look into transferring some credits to him.

I thought the 3300 was between both of us so I'm not sure why they are giving it all to me (I thought I read somewhere that it would automatically go to the higher earner, but I was very confused by what I was reading so I might have picked it up wrong).

Thanks again.
L

No you're getting confused - your 3,300 is (most likely) made up of:

Personal credit (your half of the 3,300 for a married couple): 1,650
PAYE allowance (all PAYE workers get this and it isn't transferable): 1,650
Total tax credit for you: 3,300

Your husband's tax credits will be the same, assuming he's also a PAYE worker.

Looking at your figures above, your taxable gross is 12,152.33 - the notional tax on this at 20% is 2,430.40, and you have a tax credit for the year to date of 2,475. So you're effectively using up almost all of your tax credit (you have €45 left over from the first 9 months!), so there's not really any tax credit to be transferred, or else you'll end up paying tax yourself while he pays less.

If you look at your cut-off, this is 2,733.33 per month, which equates to 32,800 annually. Obviously you only need enough cut-off to ensure your income is covered, and you are allowed to transfer up to 9k of this to your husband. So since you earn less than 23,800 you should transfer 9k of Standard Rate Band to your husband. If he's paying tax at 41% it will reduce / eliminate the amount of tax he pays at the high rate.

Thank you for your reply mandelbrot, things are getting slowly clearer. So you mean that I shouldn't transfer "tax credits" to him, but rather I should transfer "standard rate band"?

Probably another stupid question, but if I transferred tax credits to him (so I would have to pay some tax at 20%) then he would have to pay less tax, so (since his salary is bigger) would this not result in an overall gain for us as a couple? ( I mean since 20% of what I earn is less than 20% of what he earns).

Thanks again for all the help - it is really useful. Where do you go to learn this stuff? I did look on the revenue website and the citizens information website but I came away none the wiser!

louisa said:

Thank you for your reply mandelbrot, things are getting slowly clearer. So you mean that I shouldn't transfer "tax credits" to him, but rather I should transfer "standard rate band"?

Click to expand...

Yep

louisa said:

Probably another stupid question, but if I transferred tax credits to him (so I would have to pay some tax at 20%) then he would have to pay less tax, so (since his salary is bigger) would this not result in an overall gain for us as a couple? ( I mean since 20% of what I earn is less than 20% of what he earns).

Click to expand...

No, it'd make no difference overall, as long as ye are both using up all of the tax credits between ye. Best explained with an example:

Husband earns 30k, tax credits of 3,300 as already explained.
Wife earns 18k, same tax credits of 3,300.

So husband pays tax of:
30k @ 20% = 6k
Less tax credit 3,300
Tax payable 2,700

And wife pays tax of:
18k @ 20% = 3,600
Less tax credit of 3,300
Tax payable 300

Total earnings: 48k
Total tax paid: 3,000 (2,700 + 300)

Now if you give half your tax credit to the husband (1,650):

Husband pays tax of:
30k @ 20% = 6k
Less tax credit 4,950 (3,300 + 1,650 from yours)
Tax payable 1,050

And wife pays tax of:
18k @ 20% = 3,600
Less tax credit of 1,650 (3,300 - 1,650 transferred)
Tax payable 1,950

Total earnings: 48k
Total tax paid: 3,000 (1,050 + 1,950)

louisa said:

Thanks again for all the help - it is really useful. Where do you go to learn this stuff? I did look on the revenue website and the citizens information website but I came away none the wiser!

Click to expand...

I dunno really, I studied tax as part of my degree in college and then had to hit the ground running training as an accountant, so I don't really know what's suitable for a layperson!

Thanks again mandelbrot, yes that makes perfect sense. I'm not quite an accountant yet, but I'm definitely wiser than I was yesterday! Much appreciated.

Hi Louisa- you might find my Excel 2007 spreadsheet 'Employee tax calculator' handy for calculating the impact of possible changes to how you allocate cut-off or credits. It's at http://taxcalc.eu/monthlyss.

However, it won't actually explain HOW the figures are calculated- Mandelbrot did a spot on job above for that

And as you are not an accountant there's always the "University of Life".
Begin by studying that payslip until you are clear on every line of it and move on from there. It amazes me how many people just read the bottom line.

The websites you mention are very helpful but you may need to read them several times. Remember they are written in civil service speak

Hi,
thanks for the advise. Will have a look at that spreadsheet deadlyduck, but I would like to understand what is going on too.
For anybody who is not sick of me yet, I have realised that there are a few things I still don't get. Regarding pension - there are the following 5 lines - does anybody have any guess what this means?

Pension : 0.00
Pension : 0.00
Pension : 42.47
Pension Full : 14.62

ER Pension: 283.13

And also, I have realised that I don't know where the number below comes from:
This period: To date
Cut Off : 2733.33 : 24600.00

Many thanks again,
Louisa

Your cut off is the amount you can earn that will be taxed at 20%.(Remember,you then deduct your tax credit)