Tax on Commission Payments

[Steve75]

Hi All,

I am bit confused at the moment, I have earned gross commission of €1,008 & €1,284 for May and June respectively. We have had a problem with payroll in these months and commission was not paid at all in may but a mid month payment and final payment were made in June to cover both. The problem is I think it is wrong and I am hoping you may be able to help me out:

I have been paid a total of €1,146 net for the above commisson, I thought this was very low and queried this with our payroll dept. Below is the reply received:

'If we deal with only the commission amounts for the moment, we can see that you were due EUR2292.00 gross (EUR1008 + EUR1284) for the two months and this amount equates to roughly EUR1146 net (EUR2292 @ 50%). You are liable for 48% tax.

To date you have received the following net payments for your
commission: July 10th EUR504 July 26th - EUR642

These amounts (EUR504 + EUR642 ) sum to EUR1146.00'

I had assumed that your tax credits etc would reduce your tax exposure, it looks like the above has all been taxed at 48%, I again queried this and got this reply:

'As your earnings exceed your SRCOP (Standard Rate Cut Off Point) of €2672.00 every month, you are liable to pay tax/PAYE at 42% on everything in excess of this amount'

Could you tell me if I am being treated correctly?


Thanks,
Steve

 

[AJC]

Hi All,

I am bit confused at the moment, I have earned gross commission of €1,008 & €1,284 for May and June respectively. We have had a problem with payroll in these months and commission was not paid at all in may but a mid month payment and final payment were made in June to cover both. The problem is I think it is wrong and I am hoping you may be able to help me out:

I have been paid a total of €1,146 net for the above commisson, I thought this was very low and queried this with our payroll dept. Below is the reply received:

'If we deal with only the commission amounts for the moment, we can see that you were due EUR2292.00 gross (EUR1008 + EUR1284) for the two months and this amount equates to roughly EUR1146 net (EUR2292 @ 50%). You are liable for 48% tax.

To date you have received the following net payments for your
commission: July 10th EUR504 July 26th - EUR642

These amounts (EUR504 + EUR642 ) sum to EUR1146.00'

I had assumed that your tax credits etc would reduce your tax exposure, it looks like the above has all been taxed at 48%, I again queried this and got this reply:

'As your earnings exceed your SRCOP (Standard Rate Cut Off Point) of €2672.00 every month, you are liable to pay tax/PAYE at 42% on everything in excess of this amount'

Could you tell me if I am being treated correctly?


Thanks,
Steve

If you are getting paid a basic income in excess of 2672 per month (presuming you have been employed throughout the year) then what you got is broadly correct.

You should have paid PAYE & PRSI at the top rate of 48% inclusive on your additional income which should have given you 1192 (i.e. 52% of the amount earned) after deductions.

If you had no other income, or have had on average income of less than 2672 per month for the year to date, then your after tax would be higher

 

[CCOVICH]

I would have thought that you pay 42% income tax, 4% PRSI, and 2% Health Levy-this amounts to 48%.

The extra 2% maye be PSRI-it depends what PRSI class you fall into and whether or not you have reached your ceiling for the year.

 

[Ned_ie]

I think you are. The unfortunate thing here is that both payments were made in the same month and as such are taxed in the same month. If you have no other income, you should have received an accumulation of the May credit also. However, you should check at the year end to see if you are entitled to a refund from Revenue.