# Calling all brainboxes - please help me with a PRSI Calculation



## z103 (12 Dec 2007)

I'm trying to work out the following calculation, and am getting different results depending on who I ask.
I've also looked at the ready-reckoner
http://www.welfare.ie/publications/prsi1_07.pdf
(a 48 page 'ready reckoner!)

Anyway, here's the question-
Using 2007 figures, Class A PRSI

Employee has earned €46200 up till November.
Final payment is December.

December payment of €73800 (total gross for the year = €120000) Note that both ceilings are straddled

I'm getting the answer of €1657, is this correct?


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## Ham Slicer (12 Dec 2007)

€1,913.98

€127*52/12 = €550.33 @2% = €11.00

€48,800 - €46,200 = €2,600 (before hitting ceiling) - €550.33 = €2,049.67 @ 6% = €122.98

€73,800 - €2,600 = 71,200 @ 2.5% = €1,780

€11 + €122.98 + €1,780 =  = €1,913.98

I'm open to correction by other brainboxes only of course !


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## TripleA (12 Dec 2007)

Ham Slicer, the 2.5% rate only applies on salary above €1,925 per week or or €8,342 per month or €100,100 per annum. 

Its 2% up to that point (from €48,800)

all you need to know on PRSI is here..........

http://www.welfare.ie/publications/sw14.html


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## ClubMan (12 Dec 2007)

Ham Slicer said:


> €127*52/12 = €550.33 @2% = €11.00


Should be €551 for monthly salary.


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## secman (12 Dec 2007)

Nice bonus €70k , why worry about €300 or so on PRSI calc. !


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## asdfg (12 Dec 2007)

I calc it as 1,885.25 as follows 

First..........551 @ 2% ....................................................11.02
Next ......2,049 to bring cumulative to 48,800 @ 6% ...........122.94
Next ......5,742 to bring monthly payment to 8,342 @ 2% ....114.84
Balance 65,458 @ 2.5% ...............................................1,636.45

Total ........................................................................1,885.25

Open to correction


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## Ham Slicer (12 Dec 2007)

asdfg said:


> I calc it as 1,885.25 as follows
> 
> First..........551 @ 2% ....................................................11.02
> Next ......2,049 to bring cumulative to 48,800 @ 6% ...........122.94
> ...



I'll run with that after making a pigs ear of my own effort.


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## z103 (12 Dec 2007)

Thanks for your responses. That last one seems to make relative sense.

I'll be back next week for another PRSI brain teaser (only joking!)


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## z103 (12 Dec 2007)

> First..........551 @ 2% ..................................................  ..11.02
> Next ......2,049 to bring cumulative to 48,800 @ 6% ...........122.94
> Next ......5,742 to bring monthly payment to 8,342 @ 2% ....114.84
> Balance 65,458 @ 2.5% ...............................................1,6  36.45


I've just taken another look at this. I think the second half is wrong. Should the balance be
(71200-8342)= 62858
62858@2.5% = 1571.45

The first 2600 (Below the 48800) has already been calculated in the first half.

Total = 1872.28


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## asdfg (12 Dec 2007)

No I don't think so. 
AfaI can see the total has to add up to 73,800
so 
.......................Cumulative
First..........551.......551 
Next ......2,049 ....2,600
Next ......5,742 ....8,342
Balance 65,458 ..73,800.

Total ...73,800

Your total adds up to 71,200

I open to correction


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## z103 (12 Dec 2007)

Here is how I calculated it.
Below 48800.  2600 falls below ceiling
Band 1 = 550.33 @ 2% = *11.01*
Band 2 = 2049.67 @ 6% =  *122.98*

Above 48800. 71200 falls above ceiling
Band 1 = 550.33 @ 2% = *11.01*
Band 2 = 7791 @ 2% = * 155.83*
(Note that both these bands are 2% so they can be combined)
Band 3 = 62858 @ 2.5% = *1571.46*


Total is 11.01 + 122.98 + 11.01 + 155.83 + 1571.46 = 1872.28


You seem to have applied the bands to the amount under 48800, but not the amount over 48800

550.33 + 2049.67 + 550.33 + 7791 + 62858 = 73800


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## asdfg (13 Dec 2007)

You are applying 2% on 1100 

Band 1 551 @ 2% = 11.02
Band 2 as you call it is split between 
a) Under limit of annual 48,800 2,600 -551 = 2,049 @ 6% to bring cumulative up to 48,800 = 122.94
b) Under limit to bring monthly to 8342: 8342 - 2600 = 5742 @ 2% = 114.84 

Band 3 Balance of 73,800 calc on monthly basis 73,800-8,342 = 65,458 @ 2.5% = 1,636.45

Summary 

Band 1 ......................11.02
Band 2a .........122.94
.......2b .........114.84
Total Band 2 ..............237.78
Band 3.....................1,636.45

Total PRSI ...............1.885.25

I think thats it 

See also all Class A possibilities here? 

Also just to let you know the monthly PRSI @ 4% free figure is 551


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## z103 (13 Dec 2007)

> ... Band 2 as you call it is split between ...



The SW14 has all three bands split between under 48800 and over 48800 (not just band 2). I don't think you are properly splitting the above 48800 amount across the three bands. 



> Band 3 Balance of 73,800 calc on monthly basis 73,800-8,342 = 65,458 @ 2.5% = 1,636.45


Some of that 73800 is under the 48800 ceiling.

551 is 550.333... rounded up, or (127*52)/12 
I'm not going to dwell on this!


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## TripleA (13 Dec 2007)

And the prize for the most confusing thread of 2007 goes to............


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## asdfg (13 Dec 2007)

> Some of that 73800 is under the 48800 ceiling.


 
2,600 is. That is why I split Band 2. 
PRSI is the most confusing taxes ever devised, you have to take into account monthly and yearly tresholds when calculating.


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## z103 (13 Dec 2007)

Here's one final test of the result. We'll split the pay into two payments.

So, imagine the employee has been paid €46200 up till October. The €73800 is going to be split between Nov and Dec. (€2600 in Nov to bring the annual cumulative up to €48800. The remainder, €71200 will be paid in December)

What results do you get for November and December using your method?

Here's what I get;

November, Paid €2600. PRSI = 133.99
December, Paid €71200. PRSI = 1738.29

Total, Paid €73800. PRSI = 1872.28


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## asdfg (14 Dec 2007)

At last we agree


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## OldBlueEyes (14 Dec 2007)

I would go with orginal calc. (i.e. €1657.46)

.....................551 @ 2% =
....................2049 @ 6%
..................71200@ 2%
Additional.....19900 @ .5%

If you go with the second cal. (i.e. €1885.25), you would be due a health levy refund that can be claimed from the PRSI refunds section.

Band 1 ......................11.02
Band 2a .........122.94
.......2b .........114.84
Total Band 2 ..............237.78
Band 3.....................1,636.45

Total PRSI ...............1.885.25


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## asdfg (14 Dec 2007)

> I would go with orginal calc. (i.e. €1657.46)
> 
> .....................551 @ 2% =
> ....................2049 @ 6%
> ...


 
This does not take into account the monthly amount before the increase to 2.5% (anything above 8432 pm) 

all Class A possibilities



> If you go with the second cal. (i.e. €1885.25), you would be due a health levy refund that can be claimed from the PRSI refunds section.


 
I think it has to be calc on the monthly basis (See Additional Health Contributions from the link) and if any overpayment at the end of the year you have to apply for a refund. Daft but it wouldn't be the first daft element about this confusing tax.


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## asdfg (14 Dec 2007)

> I would go with orginal calc. (i.e. €1657.46)
> 
> .....................551 @ 2% =
> ....................2049 @ 6%
> ...


 
This does not take into account the monthly amount before the increase to 2.5% (anything above 8432 pm)  

all Class A possibilities



> If you go with the second cal. (i.e. €1885.25), you would be due a health levy refund that can be claimed from the PRSI refunds section.


 
I think it has to be calc on the monthly basis and if any overpayment at the end of the year you do have to apply for a refund. Daft but it wouldn't be the fitst daft element about this tax.


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## OldBlueEyes (14 Dec 2007)

> I think it has to be calc on the monthly basis and if any overpayment at the end of the year you do have to apply for a refund. Daft but it wouldn't be the fitst daft element about this tax.


 
True the calc is on a monthly basis, but as the payment in question is in December (the last month of the year) and if you know the total gross annual salary to be €120,000, I would be inclined to submit the correct PRSI + health levy for the year rather than make the calc on a monthly basis and then apply for the refund.

However, if this was in the middle of the year I would use the monthly basis calc.


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## z103 (14 Dec 2007)

> At last we agree


Our two answers seem to be different though.

Yours is 1885.25

and mine is 1872.28


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## asdfg (14 Dec 2007)

You said 


> Here's what I get;
> 
> November, Paid €2600. PRSI = 133.99
> December, Paid €71200. PRSI = 1738.29
> ...


 
I said 


> At last we agree


 
I agree with your figures as calc above


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## z103 (14 Dec 2007)

Okay,

Thanks asdfg.


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## asdfg (14 Dec 2007)

> I would be inclined to submit the correct PRSI + health levy for the year rather than make the calc on a monthly basis and then apply for the refund.


 
I think the employer makes the returns so would have to calc on a monthly basis even if the payment is at the end of the year and the employee would have to apply for the refund. 

I am open to correction in all of this. I am no expert.


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