Re: sick pay
If he just deducts the cheque from Net Pay he is :
Over paying PAYE (Using up employees Tax Credit and Cutoff Point).
Over paying Employee PRSI.
Over paying Employer PRSI.
The only advantage would be if he pushed the employee over the annual earnings ceiling earlier.
Option 1: Quick Manual / Simple computer payroll solution.
The cheque should be deducted from the Gross Pay, if the employer keeps the cheque add it to the Net Pay, or if the employee keeps the cheque added and subtracted to the Net Pay. This shows the employee ( and a revenue audit) how it was handled.
The net result is the employee and employer will save money, but the net pay will *not* remain the same.
Option 2: Long Manual / Advanced computer payroll solution.
Take a note of the employees normal Net Pay. Enter value of the cheque as a Net Deduction. Perform a Net to Gross calculation on the payroll for the required Net Pay. The Payroll will calculate the required (Salary) Gross Pay taking into account the Net Deduction for the cheque.
The net result is the employee and employer will save tax/money, but the net pay *will* remain the same.
Towger.