FAQ FAQ on Income Levy

Just wondering if any of the organisations involved with older people have advised them that they should send evidence of their medical card to their pension provider if appropiate so as to avoid the levy. I note it is the revenue will provide refunds if the levy was incorrectly applied. Are the pension providers writing to people advising them of this or is it up to pensioners to furnish the info. If yes i feel there should bemuch more publicity becasue many people would not relish having to get in touch with revenue to try and get a refund. I appreciate the exemption applies to all holders of medical cards some of whom may not be pensioners.
 
My husband is due to receive back pay from 2007 that is finally being paid but it is being put through payroll as normal. Should he have to pay the 1% levy on it even though it is for work he did in 2007?
 
sandrat said:
My husband is due to receive back pay from 2007 that is finally being paid but it is being put through payroll as normal. Should he have to pay the 1% levy on it even though it is for work he did in 2007?
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The basic answer is Yes. The more long winded answer is Maybe.
 
My understanding is that you pay tax on salary income ["Schedule E"] using the rates and rules which applied for the tax year to which the salary relates.
So- if your husband is receiving back-money [eg sales commission] for 2007 at this time, the income should be taxed using the SRCOP/ tax rates/ tax credit data which apply in 2007 and not 2009. Therefore, the levy won't apply to it.

Different rules may apply if the income is from 'trading' eg uncollected debts now being collected (assuming that the debts weren't previously taxed as income in 2007).
 
I'd suggest that he should take this up with his payroll department and/or visit/phone the Revenue Commissioners to clarify the applicable treatment.

Prior to giving you my answer above, I checked an Income tax book which indicated the outlined treatment- you are charged using the rates/rules which applied in the period to which the income refers, no matter when it was received. In the book, an example was given of a salesman receiving commission in March 2008 which referred to the calendar year 2007. Tax was charged using 2007 rules/ rates.

It could be that some time limit applies which the book doesn't indicate but as it would likely be to his advantage to get clarity I'd recommend further query!
 
money was back pay under a pay agreement and the semi state people sending the money instructed payroll that 1% was to be applied for the levy
 
I've checked this with revenue and they said to get a letter from payroll detailing the amount that related to a previous tax year. At the end of the current tax year you can claim a refund of the overpayment
 
Sandrat,

I found the following information which unfortunately states that it's the date of payment that determines whether or not the levy applies:

"An employee is due to receive back pay in 2009. Even though the back pay relates to 2008 will the payment be subject to the income levy?
Yes. Any payments made on or after 1 January 2009 but which relate to 2008 (or earlier years) will be subject to the income levy. It depends on the date of the payment rather than on when the income was earned. For example, where an individual does overtime in December 2008 and receives the payment for this overtime in January 2009, this payment is subject to the income levy."

The link is at http://www.revenue.ie/en/practitioner/law/income-levy.pdf
and the above is on page 18 of that file.
 
Can someone answer the following question?

If you earn more than 15028, say 16028, do you pay the 2% levy on the 1000 or on the 16028?
 
Sherman said:
AFAIK only on amounts above €15,028.
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If thats the case, then why I am being charged on my payslip, exactly 1% of my gross every month for the levy?

Surely, they should be deducting the exemption threshold value divided by 12 and then getting 1% of the balance each month?
 
From the Finance document (as referenced by Towger above).
(shows the pre-May 1st amounts and percentages)


2.1 Are the first €18,304 p.a. earnings exempt (i.e. will the 1% levy be on income greater than 18,304 p.a. and less than €100,101 p.a.)? ​
[FONT=Times New Roman,Times New Roman]No – once your income is greater than the minimum threshold above, you pay the levy on the full amount of your income.

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My wife works part time and gets €300/month, but has been paying the 1% levy since Jan.

How can this be as she will never break the threshold in the year?

Do the payroll systems automatically take the money regardless of the salary and it gets adjusted on month 12?
 
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