Health Insurance Health Insurance BIK

[liam bourke]

I have recently got company health insurance recently at work BIK after 6 months probation.
I got my payslip ,but noticed I was been taxed on the health insurance.
is this correct?

 

[odyssey06]

I have recently got company health insurance recently at work BIK after 6 months probation.
I got my payslip ,but noticed I was been taxed on the health insurance.
is this correct?

If your employer is paying for the cost of the health insurance, then it will be taxed under BIK.

To complicate matters, you are then entitled to tax credits because you did not get the tax relief at source of 20% on the medical insurance premium that you would have been entitled to had you paid the premium directly.

See section "Policies paid by employers (as a benefit-in-kind)" on this Revenue page:

Your employer may choose to pay medical insurance to an approved insurer for you or your family as a benefit-in-kind. 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.

Medical insurance premiums

This page details tax relief on medical insurance premiums

www.revenue.ie

 

[liam bourke]

so basically you are in affect paying for the health insurance?

 

[messyleo]

No you pay for approx half of it if you are a high rate taxpayer i.e. the tax you would pay if you had received the benefit as salary

 

[donalh]

Your employer should be up front about the BIK and how it will affect your net pay. Ask for additional information (e.g. the premium amount so you can calculate the BIK impact) so you make an informed decision. In most cases, the benefit is worthwhile unless you have specific needs that the company plan does not cover (affects families with additional needs / disabilities).

 

[Gordon Gekko]

Your employer should be up front about the BIK and how it will affect your net pay.

It’s not necessary for the employer to be ‘up front’ because they’ve nothing to hide.

A policy that ordinarily costs €1,300 will cost an employee [(€1,300 + €200) x 52%] - €200, i.e. €580, assuming that he or she is a higher rate tax and USC payer.

In the absence of other unusual factors, e.g. can’t even afford €580, don’t want health insurance at all, or have an existing policy that covers something quirky, it’s a good deal that most people would be foolish to refuse.