# Public sector employees pay higher taxes than private sector employees



## ColmFitzgerald (8 Feb 2015)

Great thread
In the public sector, tax rates are significantly higher. Are there estimates for those in the public sector?


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## Purple (8 Feb 2015)

ColmFitzgerald said:


> Great thread
> In the public sector, tax rates are significantly higher. Are there estimates for those in the public sector?


Can you give examples of these higher taxes?


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## Protocol (15 Apr 2015)

The PRD.

Is it a tax?

I suppose it is, as you must pay it to the State, and you don't earn any specific benefit.

So it seems to qualify as a tax.


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## Steven Barrett (15 Apr 2015)

Protocol said:


> I suppose it is, as you must pay it to the State, and you don't earn any specific benefit.



Look at private sector employees who are members of a defined benefit scheme. Trustees tell them they can't afford the benefits anymore and they have to increase the employee contributions so they can continue to provide the same benefits. 

The employee doesn't get any extra benefits but has less money. Same with the PRD.


Steven
www.bluewaterfp.ie


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## Purple (15 Apr 2015)

Protocol said:


> The PRD.
> 
> Is it a tax?
> 
> ...


That's a bad example. The contributions made by public sector employees come nowhere near to covering their pension costs so in reality a good chunk of their income tax payments are just deferred income.


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## Protocol (15 Apr 2015)

They should not the cost of the pension.

Pension costs are shared between ee and er.


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## Purple (15 Apr 2015)

Protocol said:


> They should not the cost of the pension.
> 
> Pension costs are shared between ee and er.


You'll have to explain that post to me.


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## Protocol (15 Apr 2015)

The worker should not, and does not, bear the full cost of the future pension.

In most workplaces, the cost is shared between employer and worker.

So it is not realistic to expect PS staff to pay the full cost of their pensions.


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## Purple (15 Apr 2015)

Protocol said:


> The worker should not, and does not, bear the full cost of the future pension.


Other than the state pension, if contributed to through PRSI, the employee should absolutely pay the full cost of their pension. If their employment package contains an employer contribution that is simply another part of their pay. The employer should never have any open ended or undefined liability, such as is the case in many defined benefit pensions, especially if the employer is the state or is funded by other tax payers.



Protocol said:


> In most workplaces, the cost is shared between employer and worker.


In the vast majority of work places the cost is not shared between the employer and the employee. There is a defined contribution pension that the employee funds and, in some cases, the employer pays a percentage as well but that is simply part of the employees total remuneration package and is quantified as such.



Protocol said:


> So it is not realistic to expect PS staff to pay the full cost of their pensions.


It is total unreasonable to expect other tax payers to fund the pensions of public sector employees without it being quantified as part of their overall pay and without it being a paid as part of a defined contribution pension.


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## Protocol (15 Apr 2015)

Ah well, if you treat the er cont as staff wages, then ok, the ee is paying all the pension conts.


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## PaddyBloggit (15 Apr 2015)

Protocol said:


> Ah well, if you treat the er cont as staff wages, then ok, the ee is paying all the pension conts.



What may I ask is an er? an ee? and a conts?


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## Protocol (15 Apr 2015)

ee =employee
er = employer

conts = pension contributions


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## Purple (15 Apr 2015)

Protocol said:


> Ah well, if you treat the er cont as staff wages, then ok, the ee is paying all the pension conts.


I agree but that employee wage should be quantified and shown as the real wage. If that was the case then the true pay levels within the public sector would be apparent and people would be shocked at just how high they really are.
The employees pension should be based only on the amassed fund value of their pension when they retire. In other words there should be no unfunded defined benefit pensions and, over time, no defined benefit pensions at all.


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## Jon Snow (15 Apr 2015)

Purple said:


> I agree but that employee wage should be quantified and shown as the real wage. If that was the case then the true pay levels within the public sector would be apparent and people would be shocked at just how high they really are.
> The employees pension should be based only on the amassed fund value of their pension when they retire. In other words there should be no unfunded defined benefit pensions and, over time, no defined benefit pensions at all.



Don't the periodic analyses that the likes of CSO/ESRI carry out on the public/private pay gap, factor in the value of the DB pension...


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## Purple (16 Apr 2015)

Jon Snow said:


> Don't the periodic analyses that the likes of CSO/ESRI carry out on the public/private pay gap, factor in the value of the DB pension...


Yes but pay scales should reference all pension contribution values and all "allowances" that are pensionable.
What someone's basic pay is is irrelevant. What's on their P60. That's what matters.


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