Holiday Pay tax query

[EVIL_EU]

Greateful if anyone can advise on the following.

I am on the lower rate of paye tax at the moment. My employer lumps in my holliday pay with the previous weeks wage so I get the one payslip for the lot which seems to read like as if I had worked a huge amount of over-time that week (which I haven't). The result is that I get heavily taxed on it.
Does anyone know if he is doing this to fool me in some way or does the tax all ballance out at the end of they year anyway.

When I query him about it he bamboozles me with bull, and I'm not well up on accounts stuff.
I don't want to query it with revenue incase it puts him out of business as I would prefer to be working than on the dole.

 

[Joe_90]

If you earn less than €32400 then you pay income tax at 20% PRSI at 4% and USC at 7% on your salary each week.

If your holiday pay is paid early in the year it may push you into the higher band that week, but you will get a little of this back each week until you are taxed at 20%, plus PRSI & USC.

 

[Black Sheep]

Do you get payslips. If not ask your employer for them. They will explain how your holiday pay is taxed and if you are still not clear you can take those slips to some friend who will explain.

You also need to check if the correct PRSI is being paid in the holiday pay. Sometimes only 1 PRSI payment is made for a holiday period of 2 weeks where it should be 3.

 

[mathepac]

If your holiday pay is handled correctly (payment in advance for 1 or two weeks holidays) then you should get either twice (or three times) your ordinary week's pay in advance of your holidays.

 

[JoeRoberts]

Unfortunately many payroll operators don't fully understand payroll so follow Mathepac's simple advice of getting twice your normal net pay. Never trust what comes from a payroll dept ( either as an employer or as an employee) . Always question if in doubt. Many payroll operators could not work out the proper net pay if you gave them a pen, paper, calculator and list of list rates/allowances without a computerised payroll package. Sad but true.

 

[mathepac]

Unfortunately many payroll operators don't fully understand payroll so follow Mathepac's simple advice of getting twice your normal net pay. ...

I used to design, write, support and customise payroll packages for a living one time.

One of the facilities that got great support from auditors, weekly-paid employees and payroll departments alike was the facility to input a number of holiday weeks for an employee. This had the effect of increasing TFAs (pre tax-credit days), taxable weeks, pensionable weeks, insurable weeks, reducing annual holiday entitlements, etc.

Any decent commercial packages out there today have similar facilities, reducing the number of manual adjustments that cruder systems need to process holiday pay paid in advance.