christmas bonus tax

[Cossie39]

every year i pay over 50% tax on my christmas bonus(which is paid in vouchers, not cash). its included in my monthly pay, so my earnings are my normal salary and the bonus. the rate of tax seems ludicrous. can i be taxed on vouchers? why am i taxed so highly? the value of my bonus is 1500 before tax, 732 afterwards. can i claim any of this back or anything. i should have asked this a long time ago.

 

[diggerdigger]

Well, I believe 500 should be tax free, as allowed by revenue as a small benefit.

1000 then should be taxed at your normal rate, assuming the amount doesn't push you over a threshold. Have you asked your HR/payroll how they are calculating the tax?

Specifically, what type of vouchers? Are they somehow redeemable for cash? If so they would not qualify as a small benefit.

 

[Gordon Gekko]

I’m pretty sure that €500 is tax free, but anything more than that is fully taxable (e.g. €501 is fully taxable).

It would be better for them to give a €500 voucher and €1,000 as a normal payment. That would net you €980.

 

[Cossie39]

they are vouchers for a well known irish supermarket, not redeemable for cash... so if 500 is supposed to be tax free...im taxed on the other 1000? am i taxed so high as its included in my monthly salary as christmas box? 1500 xmas box, first 500 tax free, so 1000 to be taxed, and come out with 232 out of that 1000

 

[Cossie39]

I’m pretty sure that €500 is tax free, but anything more than that is fully taxable (e.g. €501 is fully taxable).

It would be better for them to give a €500 voucher and €1,000 as a normal payment. That would net you €980.

thanks.... i thought i get the 500 tax free and the rest is taxed... either way the taxation is a joke

 

[Gordon Gekko]

thanks.... i thought i get the 500 tax free and the rest is taxed... either way the taxation is a joke

I would argue that your company’s approach is the issue. Why not just pay it in the way I’ve suggested? Maybe suggest that?

 

[Cossie39]

I would argue that your company’s approach is the issue. Why not just pay it in the way I’ve suggested?

i work for a well known irish retailer, they issue the vouchers so they will be spent back into the business.... im very grateful for thw bonus, plenty of people dont get one, its the tax that annoys me, its over 50% of my bonus in tax

 

[Gordon Gekko]

Fair enough, that’s life so I guess.

 

[Steven Barrett]

i work for a well known irish retailer, they issue the vouchers so they will be spent back into the business.... im very grateful for thw bonus, plenty of people dont get one, its the tax that annoys me, its over 50% of my bonus in tax

That's the Irish taxation system, 40% income tax, 4% PRSI and up to 8% USC (11% if self employed and earn over €100k). It annoys everyone when they get a bonus for working hard and doing well and the government get more than you do.

 

[diggerdigger]

i work for a well known irish retailer, they issue the vouchers so they will be spent back into the business.... im very grateful for thw bonus, plenty of people dont get one, its the tax that annoys me, its over 50% of my bonus in tax

Yes, but if they simply issued the bonus as 3 individual 500 vouchers, then one (i.e. the first voucher) would be tax free and the 2 subsequent would be taxed. I cannot see it costing the company anything other than a moments admin, and staff get more, and the vouchers still get spent there the same.