Calculating benefit in kind on health insurance

[gonesp]

Hi everyone,

My salary is paid on a bi-weekly basis and in 2022 there will be 26 pay periods. I'm looking at my payslip and I see a value of €117.86 for BIK and on my health insurance membership certificate I see the following details for 2 adults and 1 child:

• Total Net Subscription (€): €2,708.00
• Gross Subscription (excluding REC for tax purposes): €3,182.30

I'm having some trouble understanding where does the BIK shown in my payslip coming from. How is this calculated? I've searched everywhere and even tried reaching out to the health insurance company, but I've gotten nowhere.

Can you please help me understand how it's being calculated?

Thanks in advance!

 

[ClubMan]

Seems to me that the BIK should be €3,182.30 ÷ 26 = €122.40?

Is your employer paying the full premium?

Note that where an employer pays for medical insurance as a benefit in kind the employee can claim tax relief via myAccount (it's not granted automatically).

Medical insurance premiums

This page details tax relief on medical insurance premiums

www.revenue.ie

Policies paid by employers (as a benefit-in-kind)​

Your employer may choose to pay medical insurance to an approved insurer for you or your family as a [broken link removed] If they do, you will:

• be taxed on the gross value of the policy or policies
• need to claim medical insurance tax relief from Revenue as it was not given at source.

Use myAccount to claim the credit(s) if your employer pays medical insurance relief for you or your family. You can make a claim during the year or after the year has ended.

 

[gonesp]

Seems to me that the BIK should be €3,182.30 ÷ 26 = €122.40?

Is your employer paying the full premium?

Note that where an employer pays for medical insurance as a benefit in kind the employee can claim tax relief via myAccount (it's not granted automatically).

Medical insurance premiums

This page details tax relief on medical insurance premiums

www.revenue.ie

I'm not sure if my employer paying the full premium. Would I be able to see that in the insurance membership certificate or in my payslip? Where would I be able to get that information?

 

[ClubMan]

I'm not sure if my employer paying the full premium. Would I be able to see that in the insurance membership certificate or in my payslip? Where would I be able to get that information?

I would expect the renewal letter (online or hardcopy) to clarify if the employer is paying all or just some of the premium. Or just ask your employer.

 

[gonesp]

I would expect the renewal letter (online or hardcopy) to clarify if the employer is paying all or just some of the premium. Or just ask your employer.

At the bottom of the membership certificate I found this message:

A Government Levy applies to all health insurance policies. This calculates at €1,048.00 for this policy. The total net subscription figure is net of all tax reliefs and takes into account a portion of the Government Levy.

Could this have any impact on the value?

 

[asdfg]

It looks like your employer is saying there will be 27 paydays in 2022 - (3192.30 ÷ 27 is 117.86) you should contact your wages section or whoever does your calculations for an explanation.

 

[ClubMan]

Well spotted @asdfg!

Edit: from searching around it looks like, for payroll purposes, some years have 26 fortnights and some have 27. So a 27 fortnightly payroll year in this case would explain the BIK figure.

 

[gonesp]

Well spotted @asdfg!

Edit: from searching around it looks like, for payroll purposes, some years have 26 fortnights and some have 27. So a 27 fortnightly payroll year in this case would explain the BIK figure.

Yeah, that seems to be the case! Thank you for the help! I'll reach out to HR to understand why this is happening.