33yrs High Salary = High Tax Help

[cremeegg]

I feel for you @solarman2022. You work hard, get your career path sorted and you earn the reward of a good well-paying job at an early age. All the classic things that society should be encouraging. Sadly, in Ireland we reward this responsible and socially beneficial behaviour with eyewatering personal income tax rates.

All true.

However. We in Ireland have a system where young people, of any background, can receive an education which allows them to do the kind of work that pays well.

We have a system which delivers social peace and security.

All of this and other things taxes pay for, attracts employers to locate here, to provide the type of employment where hard working 33 year olds can earn €99k. Lots of people around the world work much harder in demanding physical jobs for a pittance, they probably wish they could pay tax.

 

[solarman2022]

Vested but not exercised or what?
Help with what?
Stock incentive schemes normally benefit employees.

I’m not sure what they even mean 3% basically at 1% per annum . L

I think instead on focusing on what you end up with and how much other gets, you could focus on what you have and what you are doing with your money.
You have a good income but what do you plan to do with it? What do you want out of it?
If you think that some other people have it easier than you in terms of money/job, no one stop you from changing job/skills.

All true.

However. We in Ireland have a system where young people, of any background, can receive an education which allows them to do the kind of work that pays well.

We have a system which delivers social peace and security.

All of this and other things taxes pay for, attracts employers to locate here, to provide the type of employment where hard working 33 year olds can earn €99k. Lots of people around the world work much harder in demanding physical jobs for a pittance, they probably wish they could pay tax.

All valid points and I definitely need to look at changing my mindset for sure .

Is it possible instead of a salary increase ask the employer to just pay the increase directly to PRSA ? Or is it exactly the same as the salary increase as it’s pre tax ? I’m just thinking of the cheapest solution for them

 

[Bow tie]

If you have an option to put salary sacrifice or a bonus into an approved revenue scheme for 3 years then absolutely do.
After the three years vesting period, you bonus of say 5k will be allowed to you tax free and with profit up to the yearly 1200 euro personal CGT limit. (You pay USC and PRSI on the share purchase).

Employment related shares

Employment related shares

www.revenue.ie

 

[ClubMan]

I’m not sure what they even mean 3% basically at 1% per annum . L

I have no idea what this means.
If you don't either then you need to clarify it with your employer.
I.e. what is the nature of the stock incentive scheme and its benefit to you.

 

[Clamball]

1. Start a pension, max contributions, get the employer to match as much as possible if they do that. Loads put bonuses into pensions. And if they do salary foregoing then definitely invest. Also if your company does none of this - a different employer may offer better overall package. That is the only way you get to give revenue less tax and plan for your future.

2. You can afford to purchase a home, so you should do that. People often say when is the best time to buy is now when you want to buy, Even a 20 year mortgage will get you to 53, so time to get moving, use you €100K savings and make them work for you.

3. Dependant, future needs - education, housing needs, what will the dependant need over the next 10-15 years, plan for that.

4. The parents house, they are probably in their 60’s so will they need the use of the house again, are you an only child, should you buy the house from them? Is is suitable for your long term needs? Lots to consider.

5. Enjoy the money you earn, you deserve it, you have worked hard to get where you are at now.

Best of luck

 

[joe sod]

All true.

However. We in Ireland have a system where young people, of any background, can receive an education which allows them to do the kind of work that pays well.

We have a system which delivers social peace and security.

All of this and other things taxes pay for, attracts employers to locate here, to provide the type of employment where hard working 33 year olds can earn €99k. Lots of people around the world work much harder in demanding physical jobs for a pittance, they probably wish they could pay tax.

I doubt it's an easy job though earning 99k at 33, there has to be alot of responsibility or big demands.
The Irish system disincentives people like you because it takes off too much tax relative to other European countries and especially the UK.
You can get all the benefits of the Irish system on a much lower salary or getting benefits so why should you kill yourself working hard.
As regards the education system yes it is basically free but many people especially doctors get the education and then head off to aus or US never to return.
You the single person that stays is paying for all this

 

[arbitron]

I doubt it's an easy job though earning 99k at 33, there has to be alot of responsibility or big demands.
The Irish system disincentives people like you because it takes off too much tax relative to other European countries and especially the UK.

Ireland is consistently in the middle of the pack or even below average for effective income tax rates and we have a relatively progressive system. Having worked abroad in a low-tax, a mid-tax, and a high-tax country I would choose Ireland (or the high-tax one). Being nickeled and dimed in after-tax pay for healthcare or education gets old very fast.

You can get all the benefits of the Irish system on a much lower salary or getting benefits so why should you kill yourself working hard.
As regards the education system yes it is basically free but many people especially doctors get the education and then head off to aus or US never to return.

It would be pretty funny if it turns out the OP is a doctor! But I suspect not as most doctors are not earning close to €99k at 33.

The vast majority of Irish medical graduates spend most of their working lives in Ireland, paying back much more in taxes than their medical degree cost the state. Anyway going by your logic above their parents would paid plenty of taxes so surely that covers it...?

You the single person that stays is paying for all this

It's really the high-earning dual-income households without children that see 6-figure tax bills every year who are "paying for all this", i.e. vital social safety nets to ensure that every human being is taken care of regardless of their life circumstances or economic output.

OP, the way I look at my payslip is that the net is my actual salary, and that is the number I care about. I mentally classify any payroll deductions as paid for by the employer as their cost of doing business. Does an employee care about the cost of Employer PRSI or Employer Pension Contributions? No. None of the gross amount comes through my hands anyway, so I just think of all of the deductions as taxes on my employer. Might sound silly but it works for me.

 

[joe sod]

Ireland is consistently in the middle of the pack or even below average for effective income tax rates and we have a relatively progressive system. Having worked abroad in a low-tax, a mid-tax, and a high-tax country I would choose Ireland (or the high-tax one). Being nickeled and dimed in after-tax pay for healthcare or education gets old very fast.

UKTaxCalculators - Tax Comparison Between Ireland and United Kingdom

Tax Comparison between Ireland and United Kingdom - See what you earn against what you can buy and compare - Just enter your income in any currency!

www.uktaxcalculators.co.uk

i found this site for comparing different country's tax and cost of living basis relative to UK, only tried it for comparisons between Ireland and UK,
according to this on 99K salary you are paying 36% tax on that salary in Ireland while paying 32% in UK. To be honest I thought the difference would be bigger so maybe I was over egging the pudding from the taxation perspective.
However at the bottom it shows the price of common purchases, and big things like a car and a one bedroom apartment. In this regard Ireland is way more expensive than the UK. However the big disadvantage for a single person is where it comes to investments and the tax free CGT allowances and tax free investment accounts in UK which are unavailable in Ireland

 

[Right Winger]

However. We in Ireland have a system where young people, of any background, can receive an education which allows them to do the kind of work that pays well.

We have a system which delivers social peace and security.

All of this and other things taxes pay for, attracts employers to locate here......

And...

It's really the high-earning dual-income households without children that see 6-figure tax bills every year who are "paying for all this", i.e. vital social safety nets to ensure that every human being is taken care of regardless of their life circumstances or economic output.

I think there's a fatal flaw in the reasoning that justifies our tax system on the basis that it delivers good stuff. (Although "social peace" in return for taxes sounds a bit like a protection racket!) Undoubtedly there is a need for some tax to deliver various social goods and services. But how much tax and how much service? The two key questions though, are:
1. Does the state confine itself to necessary spending on services or does it go beyond that?
2. Does the state spend taxpayer's money relatively frugally and efficiently or does it spend lavishly and generate waste?

In answering these questions in an Irish context, the impression I get is one of constant "mission creep" where the State assumes greater and greater responsibility for "doing stuff" and spending our money, coupled with an almost complete disregard for value for money. Every issue that arises leads to a decision to spend more and more money, and usually with less and less cost consciousness. Our public discourse is increasingly demanding that the State fix every problem for everyone irrespective of cost. If indeed this is what we want, then the price is the aforementioned eye watering tax rates. The State has unlimited powers to compel payment of taxes, and there's little incentive to get value and efficiency when you're spending someone else's money.