PAYE on Non-Salary Items: Health Insurance & Pension Contributions by employer?

[Quoi?]

Can anyone tell me if PAYE is incurred in some way on the following. I've tried ringing revenue twice today but either my phone is on the blink or they are cutting me off (conveniently just when they have to actually explain this to me...).


-Employer pays a health insurance policy for you (E.g. Quinn)
-Employer pays pension contributions (without you making any)

 

[Graham_07]

Health insurance paid by employer is benefit in kind and is taxable at your highest rate. However you are entitled to a deduction for the amount paid at the standard rate as medical insurance is tax deductible.

Pension paid by employer - not a taxable benefit on the employee

 

[Quoi?]

Health insurance paid by employer is benefit in kind and is taxable at your highest rate. However you are entitled to a deduction for the amount paid at the standard rate as medical insurance is tax deductible.

Right, so for example:

-Higher tax rate
-Employer pays €1000 Health Insurance
-I pay €410 PAYE (41%) but can them claim allowance of €200 (20%).
-End cost to me: €200

Sound right?

 

[deadlyduck]

The BIK would also be subject to PRSI/ Health contribution/ Income levy so it would cost you more than the €210.

How much extra depends on the rate of Health / Income etc you're paying on your income- these levies vary for high earners.

 

[Quoi?]

Sh!t, forgot about that.

Yes, so it would end up costing me €290 (41%PAYE +6% PRSI/Health +2%Levy).

So basically, it would cost me 29% of the value of the policy, which may or may not be that much of a saving, given that the employer offers a policy higher than I currently have privately.

Thanks.

 

[Quoi?]

At a quick calculation based I what I think the employer offers, my health insurance would be costing me about €295/year instead of €642 - though with better cover.

Interesting though as this means it equates to approx €600 extra Gross Salary when compared to an employer who doesnt offer it (excluding the enhanced cover of course); as opposed to my original calculation of ~€1300 (cost of current policy before I pay tax on the income).