Net to Gross Pay

T

The Bishop

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is there anywhere I can double check a net to gross pay calculation

I have been asked to calculate how much a €200 bonus calculation would cost and have worked it out to be 343.35
Tax @20%, Employees PRSI @ 4%, Employers PRSI @ 10.75%, USC @ 7%,

Am I correct here - these taxes seem very high?
 
Your tax bands look right, assuming they are earning in the lower tax band <~32800.

Assuming you mean 200 euro in their pocket, I would calculate as follows:

20% + 4% + 7% = 31% so 200 euro = 69%
Gross = 200 / 0.69 = 289.89
Employers PRSI is on Gross = 289.89 * 10.75% = 31.16
Total cost to Employer = 289.89 + 31.16 = 321.05

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There is another option that you could consider - The Revenue allows a single tax free gift of up to 250 euro:

The €250 small benefits relief is a yearly small benefits relief and applies to a one off benefit not exceeding €250 during the year. If an employer gives each employee one single €250 voucher in the year, the value of the voucher can be disregarded for PAYE/PRSI purposes. If the employer gives two vouchers worth €100 each, the value of the first voucher may be disregarded but the value of the second voucher has to be included as notional pay for PAYE/PRSI purposes. If the employer gives one voucher for €350, the value of that voucher (the entire €350) must be taken as notional pay.
http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/faqs/miscellaneous.html#misc15
Click to expand...

So you could give something like a 200 euro "One-4-All" voucher that is a prepaid credit card that they can use in many shops and no tax is due.
 
Many thanks for your response - good point on the employers PRSI - I should have spotted that!! You know when you look and look at something and can't see anything and then when it's pointed out its obvious!!!

If this €200 net was paid through a VAT Registered Company am I correct in saying they would also charge VAT at 23% on the total amount
 
I'm not sure, but I don't think there is any VAT on vouchers?

Gift Vouchers and Tokens
The chargeable amount in the case of goods or services supplied in exchange for tokens is the amount stated on the token as well, of course, as any money paid in addition to that amount.

The sale of gift tokens, book tokens, vouchers, etc. is not liable to tax except where, and to the extent that, the amount charged exceeds the value shown on the tokens (for example, a combined gift token/greeting card). However, when tokens, vouchers etc having a face value are supplied to an intermediary with a view to re-sale to private consumers, and are to be used to exchange goods, these tokens become liable to VAT at the standard rate on the consideration received at the time of their sale by the principal to the intermediary involved. In turn the intermediary must also account for VAT on the onward sale of the vouchers. In these cases, the charge to VAT does not arise at the time the tokens are being redeemed but instead arises on the sale of the voucher.
Click to expand...

I may need to be corrected here but I went to Liffey Valley as a Ltd Company and got a 250 euro gift voucher (prepaid credit card) and the receipt. No VAT was on the receipt I got.
 
Not talking about the vouchers - talking about a cash payment
A third party wants to pay €200 cash net through a sole trader business so the business needs to charge the 200 plus all taxes - just wondering do they also need to charge VAT as they are VAT Registered

I'm also aware of vouchers but not for this instance

Oh this gets more complicated - just wondering now will the gross payment to the company be classed as income and also be subject to tax as income in the hands of the business who is a sole trader.
 
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If it is a cash payment, then I understand it is simply treated as income and the calculations in my first post apply.
 
Thanks again - is this subject to VAT if charged out

Is the income which essentially is being handed over via the PAYE system subject to Income Tax in the hands of the sole trader who is processing the payment for his employees on behalf of a third party
 
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