BIK on company car

Adrienne41

Registered User
Messages
16
ok so I understand the calculation but how does it actually affect my wages?

If a OMV of 30,000 and 24,000 km then it’s 9,000, but is my salary increased by this and subsequently taxed.

Thought I would be down money but thus would mean an increase, no?

If Salary offered was 40k, with a car would that 40 include the 9k BIK or is my salary now 49k?

Thanks
 
Not a tax expert or even close to it, but,
Using your figures, the 9k was added to my gross for taxation purposes only, and I was taxed on the 49k
 
No, they only add the figure on to your gross pay, on paper, for taxation purposes.
 
If Im paying tax, prsi, usc on 40K, Im now taxed as if Im earning a 49k salary
 
Your salary is increased for tax purposes and reduced for payment purposes.

So gross pay €40k net pay €30k

Gross pay with BIK €49k net pay €26k
 
The following image might give a better idea of how it works:

280Nxhl.png


You can see the top income section is increased by €9000. This means that you pay tax, PRSI and USC on €49000. However, then the €9000 value is deducted from what you receive at the bottom- the net impact is that you lose out by the tax/PRSI/USC value (but you gain from having the use of the car for the year which saves you from having to pay for fuel/maintenance/insurance/road tax etc)
 
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