Is Karl Grabe's Tax/PRSI Calculator correct?

D

delgirl

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A young, single relative who is coming to work in Ireland for the first time from abroad asked me to find out what his gross annual salary of €21k would be after tax and prsi.

I used Karl Grabe's calculator which shows:

€21,000.00 annual gross salary
€ 680.00 annual tax
€ 575.84 annual prsi
___________________
€19,744.16 annual net pay

€ 1,645.35 monthly net pay

He has now arrived in Ireland only to be told by his employer that his monthly net pay is not €1645.35, but is in the region of €1,500.

Can anyone please confirm if Karl's calculator is correct?

Also, if you input an annual gross salary of €25k - it calculates the net pay as €22,284.16. But the lower annual salary of €24,500 gives a higher net amount of €22,404.16?

Thanks for your help.
 
I think that the calculator is correct. I would suspect that the employer is wrong saying
He has now arrived in Ireland only to be told by his employer that his monthly net pay is not €1645.35, but is in the region of €1,500.
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If he has come from abroad, he would have accumulated tax credits so his income for 2007 will be only €12,000 and no tax at all will be paid. You would have to get the calculation from the employer to check it.

I would be fairly confident that you will find that the employer is wrong.

Brendan
 
It doesn't apply in the OP's case but if the gross income is above the cut-off there's a small error in the figures used in the calculator that leads to a max €32 per year under estimate in the PRSI calculation. The calculator has the gross income at which employee PRSI stops having to be paid at €48,000. I think the correct figure is €48,800.
 
Bear in mind that Karl's calculator does make some assumptions about things (e.g. PRSI Class A1 only) and doesn't cater for all possible tax credits and allowances. However it should be applicable in the vast majority of PAYE cases as far as I know. I am pretty confident that his calculations would be correct within a few cents (e.g. the PRSI figures may not be 100% correct because I think the calculator only caters for the monthly PRSI exemption figure of €551 and not the weekly one of €127 - the former becomes €551 x 12 = €6,612 annually while the latter becomes €127 x 52 = €6,604 annually).
 
GeneralZod said:
It doesn't apply in the OP's case but if the gross income is above the cut-off there's a small error in the figures used in the calculator that leads to a max €32 per year over estimate in the PRSI calculation. The calculator has the gross income at which employee PRSI stops having to be paid at €48,000. I think the correct figure is €48,800.
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I mentioned this to Karl who is away at the moment and will investigate when he gets back.
 
Karl is correct.

The employer and/or Revenue have probably put him on week 1 credit cert and that's the difference. If that's the case the figures won't be as per Karl but he will be due a tax refund at the end of the year.

Alternatively you could call Revenue and ask to have a cumulative cert issued for the year which would mean no tax dedcuated and better cash flow.
 
Ham Slicer said:
Karl is correct.
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Are you sure? His 2007 Budget Notes state:
A1 PRSI RATE = 4.0% up to ceiling of 48000.0
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But I can't see if he actually applies this in the calculations as I don't really understand his PRSI calculations. Maybe this is just a typo but the correct figure is used by the calculator proper?
 
Based on OP query the PRSI ceiling is irrelevant and the PRSI calc is correct.

Obviously the ceiling for 07 is €48,800 as already mentioned.
 
ClubMan said:
I mentioned this to Karl who is away at the moment and will investigate when he gets back.
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So it looks like the PRSI ceiling was incorrectly set to 48000, I'll change it to 48800 in a couple of days unless I hear otherwise from anyone here.
 
So that's sorted now, version 2007.6 is the current version.
Also the www.TaxCalc.eu is now pointing at karlgrabe.com instead of the esatclear site so you should update your bookmarks to TaxCalc.eu.
 
Thanks Karl. I've updated the link to your calculator here:

A Compilation Of Useful Links

but it may be difficult to retrospectively fix all posts that point at the esatclear site. Is this site no longer valid, authoritative or updated? Also - as long as is returning your esatclear site as the first search result I guess that people are more likely to go there rather than www.taxcalc.eu.
 
ClubMan said:
Are you sure? His 2007 Budget Notes state:
But I can't see if he actually applies this in the calculations as I don't really understand his PRSI calculations. Maybe this is just a typo but the correct figure is used by the calculator proper?
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If you view "budget details" the figures are always the actual ones uses in the calculations. So it was a typo alright and did affect the calculation.
Yes PRSI is pretty hairy! I'm just wondering if other counrties have such complex tax systems.
 
Karl Grabe said:
Yes PRSI is pretty hairy!
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Indeed. Small point but I believe that the calculator only deals with one or other of the weekly PRSI exemption of €127 (€6,604 p.a.) or the monthly one of €551 (€6,612 p.a.) which leads to slight discrepancies depending on whether an employee is paid weekly or monthly. Maybe this is noted somewhere but I wouldn't necessarily go changing the calculator to attempt to cater for both.
I'm just wondering if other counrties have such complex tax systems.
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Well I think our tax system of gross tax less credits giving net tax is simple enough (and much easier than the old TFA way) but PRSI is a nightmare when you consider the different exemptions, bands, ceilings etc.
 
ClubMan said:
I believe that the calculator only deals with one or other of the weekly PRSI exemption of €127 (€6,604 p.a.) or the monthly one of €551 (€6,612 p.a.) which leads to slight discrepancies depending on whether an employee is paid weekly or monthly. Maybe this is noted somewhere but I wouldn't necessarily go changing the calculator to attempt to cater for both.
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Here are the figures the calculator uses (previous year shown sometimes in brackets)
A1PRSIrate = (float) 4.0; // PRSI A1 Rate
PRSIYouth = (float) 0.00; // Youth Levy - No longer exists
PRSIHealth = (float) 2.0; // Health Levy


PRSIyhLowLimit = 24960; // 480*52 No HEALTH liability if income is under this. (22880)
PRSIHealthHighDeltaRate = (float) 0.5; // add this to health levy if salary > PRSIHealthHighThreshold
PRSIHealthHighThreshold = (float) 100100;

PRSIlowLimit = 17628; // (15600) NO PRSI below this. NEW for 2006 bug fix

// PRSIceiling (14 aug changed from 48000 to 48800 was incorrrect)
PRSIceiling = 48800; // (46600) annual ceiling (no PRSI over this) - Euro OK

//Yearly exemption 6604 = 127 pw - you don't pay PRSI on this amount
PRSIexemptionYearly = 6604;
//PRSIexemptionWeekly = PRSIexemptionYearly / 52; // ** Not USED in calculations, Use yearly

So the caclulator only deals with the weekly exemption. No, I haven't noted that anywhere, probably should. I could easily use monthy instead if that was more common?
So if you have 2 people on the same constant salary and 1 is paid weekly and the other monthy: - do they have (slighely) different take home pay as a result?
 
Karl Grabe said:
So if you have 2 people on the same constant salary and 1 is paid weekly and the other monthy: - do they have (slighely) different take home pay as a result?
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Yes - since the annualised PRSI exemption figures are different if paid weekly (€6,604) versus monthly (€6,612). I guess the person paid weekly will be €8 @ 4% = €0.32 worse off! What a rip-off, eh? :)
 
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