Marginal tax rate on income above €70k is 52% so sounds correct.Husband has earned a bonus of €33.5K. We were expecting it to be taxed at 40% giving a net amount of €19,600 approx. He got the princely sum of just over €16K. We are no tax experts - but this does seem right? He has lost more than half the bonus which we weren't expecting. Any thoughts appreciated.
Thanks.
Always feel it's more theft than taxation once it goes over 50%!Thanks for the responses. It makes sense now. 52% is a hard one to swallow.
Just to share an option I’ve sometimes used in the past when due a bonus or back money from an employer.We are in the so called “squeezed middle” - it would have been nice to get just a bit more of what he earned.
It's all theftAlways feel it's more theft than taxation once it goes over 50%!
We are in the so called “squeezed middle” - it would have been nice to get just a bit more of what he earned.
Just to share an option I’ve sometimes used in the past when due a bonus or back money from an employer.
I asked them to put it into my DC retirement savings scheme as an employee AVC payment.
Once it didn’t bring me over the max allowable relief for the year it meant that I got the benefit of the full sum into my retirement savings.
It also meant of course I didn’t get anything into the hand and I was down the value of PRSI and USC at the time.
Worse off in the pocket short term, better off long term.
It can also be done later (up to end of October of following year but attributed to this year) as a lump sum AVC payment and get a tax refund if within revenue limit
Yes, from experience, I’ve done it a few times.Your last comment about "It can also be done later" is interesting. I too had similar experience last month (not the same size bonus but taxed at the same rates). Are you saying next year or even this year I could make an AVC payment as long as it was within limit and recoup some of the tax paid on the bonus.
It does! In some countries like Spain it's not even legal, I think they call it "confiscatory taxation"Always feel it's more theft than taxation once it goes over 50%!
best way to get more of it is to contribute it (or some of it) into a pension. you get all of that into the pot tax free.We are in the so called “squeezed middle” - it would have been nice to get just a bit more of what he earned.
Would be great from a personal perspective but would be too open to abuse. You’d suddenly find everyone’s ‘salary’ dropping hugely and bonuses being increased to avoid tax.It's sickening to receive a bonus and see so much taxed. What did the tax man contribute to anyones earning of a bonus. Tax some (25% maybe) but not end up where the tax man gets more than you do.
fair point. depends also on the bonus format (specified cash amount or % of salary). if its a percentage like mine then a percentage of a reduced salary would prohibit thisWould be great for a personal perspective but would be too open to abuse. You’d suddenly find everyone’s ‘salary’ dropping hugely and bonuses being increased to avoid tax.