Understanding my payslip - How to calculate tax paid?

G

gonesp

Registered User
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Hi there,

I'm trying to understand the calculations behind my payslip. I see a column for "Payments" and another for "Deductions". On the column for "Deductions" I can a row called "Tax paid".

What does this refer to exactly? I'm currently calculating the rates of each income tax rate band and I can't get to the right value I see in this row.

Let's say, for example, my yearly salary is 100k and I'm paid on a monthly basis. I'm picking up the €8333.3 monthly amount and running through the income tax rate bands, which results in €2720 in taxes. However, this amount is not exactly what I see in "Tax paid".

Can anyone help me understand how this row is calculated?

Thanks in advance!
 
There are several Irish tax calculators that you can find using a quick web search that will calculate and, in many cases, explain your deductions.
 
To calculate your monthly tax you need three figures

1. Gross monthly pay
2. Standard rate cut-off point
3. Tax credit

That will be enough for January. For the other months you also need your cumulative pay to date and tax to date
 
Assuming you are single, then
Taxable income = 8,033
Taxed at 20% = Standard rate band 36,800 / 12 = 3,066.67 x 20% = 613.33
Taxed at 40% = Balance = 8,033 - 3,066.67 = 4,966.13 x 40% = 1,986.53
Total tax = 613.33 + 1986.53 = 2,599.86
Less tax credits = 1,700 / 12 = 141.67
Tax paid = 2,599.86 - 141.67 =2,458.19


No idea where you got your 2,720 from
 
Bear in mind that the deductions on the payslip will also show PRSI and USC charges as well, not just income tax
 
One side should tell you what is liable for tax - i.e. total taxable pay. This can be made up of BIK for say health insurance and will be minus any pension payments you are making. So say you are getting free med insurance which costs the company 1200 a year and you pay 10% into your pension them the figure for taxable pay will be 8,033 + 100 ins - 803 pension = 7130. Your tax paid will be dependent whatever the SCOP and credits are of this figure.
 
jpd said:
Assuming you are single, then
Taxable income = 8,033
Taxed at 20% = Standard rate band 36,800 / 12 = 3,066.67 x 20% = 613.33
Taxed at 40% = Balance = 8,033 - 3,066.67 = 4,966.13 x 40% = 1,986.53
Total tax = 613.33 + 1986.53 = 2,599.86
Less tax credits = 1,700 / 12 = 141.67
Tax paid = 2,599.86 - 141.67 =2,458.19


No idea where you got your 2,720 from
Click to expand...
According to my calculations, taxable income is 8,333, not 8,033. Hence the 2,720
 
Did you search for and try any of the several very good Irish tax calculators that I referred to earlier? :confused: It's impossible for people to do your specific calculations without full details of your specific personal situation.
 
ClubMan said:
Did you search for and try any of the several very good Irish tax calculators that I referred to earlier? :confused: It's impossible for people to do your specific calculations without full details of your specific personal situation.
Click to expand...

I have, but I couldn't come to any conclusions on how certain items were calculated from them. I'd like to understand how these numbers come up, hence the question. Thanks for the help though!
 
Unless you post all of the relevant personal details then nobody will be able to double check your figures. And you may not want to post all such details here.
 
ClubMan said:
Unless you post all of the relevant personal details then nobody will be able to double check your figures. And you may not want to post all such details here.
Click to expand...
The information above has helped me a bunch already. Thanks for the advice!
 
Probably not the case but something to be aware of:- If you started work recently or changed employer it's possible you were placed on Emergency Tax by Revenue. When you do your calculations you'll know whether or not you are on Emergency Tax. If you find you are on Emergency Tax a telephone call to Revenue will relieve the situation.
 
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