My employer has reduced my basic !!!!!

D

daithi69

Guest
Hi

I have just been going through my payslips today and have noticed that my wages initially increased after the budget but now my employer has reduced my basic so that I now have the same take home after tax wages as I had before the budget. I have only realised this today are they allowed to do that??
 
It seems a bit cavalier, all right — was there no discussion of it? As to what your employer is allowed to do, that would depend on your contract of employment...
 
I don't think that this depends on the contract of employment. I you agreed a wage with the employer then they cannot make deductions (or reductions I would presume) without prior agreeement. If you can't get a satisfactory explanation from your employer then you should contact the DETE for advice on your statutory entitlements in this situation. You contract could still also be relevant in this situation too though.
 
Unless of course the employee has agreed a specific net pay with the employer, as is popular in the construction industry. For example if you agreed to work for €600 per week into your hand then because of the changes in the budget, a reduced gross pay would lead to the same net pay. Obviously this is not the right way to do it, but it is common in some sectors.
 
Same thing. Employer agrees to pay the employee €600 into the hand and the employer is responsible for any tax that arises. The danger in this is that if the person was married they could transfer all their credits to their partner and still receive the same wage.
Also if the employee is on emergancy tax then the employer would be paying a large amount of tax. If the employee then left before they were taken off emergency tax they could then claim back the excess tax stopped, even though they didn't pay it! As I said, a a dangerous system to operate.
 
Have you looked at gross pay and noticed a difference?

Any chance that your net pay increased in December because your yearly earnings exceeded the PRSI ceiling (€44,180) and now in the new tax year your net has returned to pre-December levels because budget changes probably wont be reflected in your net pay until February?
 
Is it legal? I've seen the term mentioned in payroll packages so I presume that it is...
 
I guess you could say its legal, but wouldn't be recommended for anybody. Not necessarily anything wrong with it as such if all side are happy with the terms and conditions, but it can get very messy when disputes arise with regard to tax and deductions, etc.
Of course it has been the norm in the construction industry as its easier for employees to know there not getting short changed. As long as they get there same net pay every week there happy. Many in this industry(or other industries) wouldnt be familiar with the correct calculation of tax, so this system ensures that they are getting what they agreed. Just need to ensure that they still obtain weekly payslips, to confirm that they are actually registered as employees.

As an aside the construction industry employees need to ensure that there employers are paying into the construction pension on their behalf as is now legally required. Seems there are a lot of companies not paying this but still deducting the employee portion from the employees.

Employees can check with http://www.cfops.ie/main/main.html (click on membership)to see that the employer has registered them.
 
Its only when an accident of something similar happens on site that the construction worker may find out that the pension payments stopped from them were not paid on to the pension scheme, so its best to be prepared.
 
You say that your takehome pay increased after the budget. However, the budget changes only came into effect on Jan 1 and PAYE workers to not see this reflected in their paypackets until the tax certs have been mailed to the employers which takes place in Jan. This is only happening at the moment.
If you saw a change in Dec, it was not due to the budget. It may have been due to the PRSI celing, as another poster pointed out, if you earn over 44K.

If you are concenred that the budget changes have not shown up in your Jan paypacket, dont worry, its the same for all of us.
 
Many thanks for all the replies, yes it seems that i jumped the gun and assumed that my employer had made an adjustment to my basic. I do earn over 44K so michaelm was correct in saying that I had exeeded the prsi ceiling and I wont see changes reflected until next month.

I found some of the above posts quite interesting. I did not think this was a common practice but it obviously is.

Keep up the good work.
 
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