How should an employer handle health insurance premiums?

Z

z103

Guest
Am I handling this scenario correctly? We pay health insurance for our employees. This comes directly out of our business account, and we get a group invoice every month from our health insurance provider.

Example;
Monthly premium = €49.50
TRS Billed = €9.90
Total paid by us to the health ins. co = €39.60

For each month
I tax the employee €49.50 as a benefit in kind.
I pay €9.90 to the revenue

The employee should apply for tax credits.


Is this correct? Seems very complicated.
 
Does this FAQ help?

[broken link removed]

The BIK treatment above looks correct (i.e. BIK on the gross premium). Not sure about the repayment of TRS received by the employer to Revenue but I suppose it probably doesn't make sense for the employer and employee to both get tax relief on the same gross premium. The employee needs to apply for the tax credit in respect of the gross premium themselves.
 
Thanks for the responses.
(Clubman - I saw your link to that on a personnel tax P60s thread, and is how I worked most of it out.)

It's very complicated. It might be easier not to bother claiming any relief, and just pay the full whack to the health insurance provider.
 
But can you actually tell the insurance provider to waive TRS and charge you (the employer) the full whack? Will Revenue not assume that the premium was net and still expect the TRS amount to be paid back?
 
Maybe that approach might cause even more problems.
It would appear the admin costs far outweigh any savings.

Anyway, enough moaning.

How much tax credits would the employee be entitled to in the example, €49.50? I've now registered for reachservices, and encouraged the employees to as well.
 
The employee is entitled to a tax credit of 20% of the gross premium. You don't have to worry about this other than applying it via their tax credits when they apply for the credit and their credits are adjusted.
 
You must log in or register to reply here.
Back
Top