2008 bonus paid in 2009, how should I be taxed?

F

fcdub

Registered User
Messages
20
Hi all,

I just received a bonus for the work I did in 2008. I recently read somewhere that it is when you earn money not when you get paid that matters from a taxation point of view.

Is this correct?

If so should I have been taxed under 2008 rules? avoiding the levy etc?????

fcdub
 
Correct, money earned in 2008 is taxed under 2008 rules and paid by Oct 2009.
 
Thats incorrect aristotle25 its the date of payment that is relevant if the payment is received in 2009 it will be subject to the tax rates and any levies the are relevant on the date of payment regardless of when the money was actually earned so the income levy will apply make sure you get paid before May 1st to minimise the tax loss after that you'll be subject to the higher levies.

From the levy FAQ

4.21 An employee is due to receive back pay in 2009. Even though the back pay relates to 2008 will the payment be subject to the income levy?​
[FONT=Times New Roman,Times New Roman][FONT=Times New Roman,Times New Roman]Yes. Any payments made on or after 1 January 2009 but which relate to 2008 (or earlier years) will be subject to the income levy. It depends on the date of the payment rather than on when the income was earned. For example, where an individual does overtime in December 2008 and receives the payment for this overtime in January 2009, this payment is subject to the income levy.
[/FONT][/FONT]
See here for bonuses:
http://www.revenue.ie/en/personal/faqs/overtime-bonuses-second-jobs.html

and here on the levy
http://www.revenue.ie/en/spotlights/income-levy.html
 
I think I am right for earnings from self-employed work. If you earn it in 2008 you pay 2008 tax rates, not 2009 ones.

So for PAYE earners it is obviously a different set up. You pay under 2009 rates\levies even if its was related to 2008 employment.
 
You must log in or register to reply here.
Back
Top