Being paid a Bonus - No Tax Credits/Std Cut Off Point

G

gweebarra

Guest
Hi,

Very confused about my pay roll department.

I get paid on the 11th each month and agree with the tax calculations etc. All is fine.

I was awarded a bonus which was paid on the 15th, so effectively two separate pay slips. The normal one contained the correct tax deductions and tax credits etc.

However, for the bonus awarded on the 15th, I was taxed at the full 42% rate and the 6% PRSI. Effectively, there was no std rate cut off point or no tax credits.

Is this correct?
 
Can you post the figures in each case? Even if you end up overpaying tax/PRSI things will generally either balance out (a) because the payroll package will take account of things or (b) because you notify Revenue possibly at the end of the tax year and they refund any overpayments.
 
Assuming you are on the higher rate of tax on a normal basis, then had you been paid the bonus on the 11th with your normal pay, the net effect would have been the same. Had tax credits been applied to the payment on the 15th then you would effectively have been without the benefit of these come your next payday.
 
Bonuses - is there any other option other than getting it at xmas and paying tax on it at the higher rate.

I know you can get gift vouchers up to the value of €250 without having to pay tax on this...

Are there any other options like this?

Gym membership...this probably incurs BIK?

Could put it into a PRSA?
 
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