Am I right in saying that there is no tax difference in who pays the VHI?
Say your employer pays you €1000 in salary
You will pay tax at 42% and employees PRSI at say 2%
So you will get €560 into your hands
If you pay €1000 VHI premium yourself
You get €200 tax relief
And € 560 net
Net cost to you €240.
If your employer pays €1000 VHI on your behalf
You will pay 44% BIK, or 440
You can claim tax relief of 200
So the net cost is €240
The Administrative burden on the employer and employee seems huge. According to the Revenue website:
Employer paying the FULL Premium for an employee
The renewal notice to the employer shows the net premium due - €1,600 (Gross Premium is €2,000)
Employer:
Pays insurance provider the net of tax relief premium of €1,600.
Pays TRS [€400] attributable to premium to Collector General
Operates PAYE/PRSI on €2,000 notional pay to employee
Employee:
As the employee has not benefited from the tax relief arising on the medical insurance premium paid by the employer, the employee is entitled to a tax credit of €400 (€2,000 at 20%) in his / her certificate of tax credits and standard rate cut off point.