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How to work out the true savings of a taxsaver ticket?

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  • 21-11-2014 4:54pm
    #1
    Reaper1969
    Registered Users Posts: 2 ✭


    I can get to and from work via LUAS, DART or Bus. How I will benefit from buying a monthly commuter ticket (Monthly Short hop, rail, bus and LUAS) @ €208 if my gross salary per month is €6,000 as opposed to buying a ticket daily, e.g., Luas or Bus or Dart each working day of the month? What if I am on a gross salary of €3,500/mth?
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    #2
    Spanish Eyes
    Registered Users Posts: 15,865 ✭✭✭✭Spanish Eyes


    The cost of your taxsaver ticket is reduced by the marginal tax rate (20/41%) and PRSI.

    So obviously, if you are on the higher tax rate, the ticket will be cheaper than if you are on the lower tax rate.

    The ticket itself still has a face value, but your employer records the value of the ticket as a "salary sacrifice" which lowers your gross pay for tax every month as a result.

    You would have to work out the difference according to your circumstances. If you use PT five days a week, it's a no brainer.


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    #3
    Riskymove
    Registered Users Posts: 10,885 ✭✭✭✭Riskymove


    if the ticket costs €208 then basically you give up €208 of your salary to pay for it.

    so you don't pay tax on that 208, that is your saving, whatever that is


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    #4
    Spanish Eyes
    Registered Users Posts: 15,865 ✭✭✭✭Spanish Eyes


    Riskymove wrote: »
    if the ticket costs €208 then basically you give up €208 of your salary to pay for it.

    so you don't pay tax on that 208, that is your saving, whatever that is

    Exactly. And don't forget the PRSI aswell.


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    #5
    LXFlyer
    Registered Users Posts: 17,546 ✭✭✭✭LXFlyer


    To correct earlier posts, you save on tax (at your marginal rate), PRSI and USC.

    Go to www.taxsaver.ie and use the savings calculator there.


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    #6
    ballooba
    Registered Users Posts: 6,315 ✭✭✭ballooba


    The savings are individual. It depends how much use you will get out of the ticket. Would you ordinarily pay €208 per month without the ticket? If not, then you can't calculate savings based on that figure.

    EDIT: €208 per month works out at €10.85 a day if you commute to work by public transport 230 days a year an don't use public transport outside of this, for instance. Your public transport use is individual to you. The ticket might even be worth more than €208 to you.


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    #7
    Spanish Eyes
    Registered Users Posts: 15,865 ✭✭✭✭Spanish Eyes


    This product is not marketed enough by the suppliers, employers, or Revenue. That is obvious when people are not sure of the benefits.

    Fail.


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    #8
    LXFlyer
    Registered Users Posts: 17,546 ✭✭✭✭LXFlyer


    Spanish Eyes wrote: »
    This product is not marketed enough by the suppliers, employers, or Revenue. That is obvious when people are not sure of the benefits.

    Fail.

    Given every bus/train has advertisements in them directing people to the taxsaver website where prominently on the front page is a link to a savings calculator, I'm not sure what more you expect them to do.


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    #9
    Spanish Eyes
    Registered Users Posts: 15,865 ✭✭✭✭Spanish Eyes


    lxflyer wrote: »
    Given every bus/train has advertisements in them directing people to the taxsaver website where prominently on the front page is a link to a savings calculator, I'm not sure what more you expect them to do.

    Not being smart, but those on public transport within the really cramped commuting times, probably cannot even see above their heads, not to mind a notice with a lot of information on it!

    Why is this information not disseminated by the employer to each employee? It could be done by an annual email with FAQs etc. But maybe not every employer is signed up either. Being involved as an employer may be optional aswell. I don't know. Seems only big outfits are in the mix.

    It just seems to me that the amazing benefits of this great scheme are not really marketed to full extent. I think that is a reasonable observation.


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    #10
    L1011
    Moderators, Business & Finance Moderators, Motoring & Transport Moderators, Society & Culture Moderators Posts: 67,697 Mod ✭✭✭✭L1011


    Spanish Eyes wrote: »
    Why is this information not disseminated by the employer to each employee? It could be done by an annual email with FAQs etc. But maybe not every employer is signed up either. Being involved as an employer may be optional aswell. I don't know. Seems only big outfits are in the mix.

    Every employer I've had that has done them has done this - and its not something that the transport operators can force them to do anyway!


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    #11
    Losty Dublin
    Registered Users Posts: 12,971 ✭✭✭✭Losty Dublin


    Spanish Eyes wrote: »

    Why is this information not disseminated by the employer to each employee? It could be done by an annual email with FAQs etc. But maybe not every employer is signed up either. Being involved as an employer may be optional aswell. I don't know. Seems only big outfits are in the mix.

    That's the employers problem, not the transport companies.


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    #12
    mikemac1
    Closed Accounts Posts: 12,395 ✭✭✭✭mikemac1


    taxsaver ring employers and offer to send on info and give presentations at lunchtime. I covered reception during lunches and often got their calls. I don't know where their office is, I guess Connolly Station but realy have no idea.

    They have lots of advertisments too, they are working to promote it


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    #13
    Spanish Eyes
    Registered Users Posts: 15,865 ✭✭✭✭Spanish Eyes


    Well I didn't blame the transport companies either. In fact I mentioned all parties...suppliers, employers and Revenue.

    The bottom line is that is is NOT marketed enough.

    My next door neighbour works for HSE and I told her about it a year or so ago. She had never heard of it. Went to her HR, and yes, no problem, sign here. Whoa!

    But she was delighted. Got a weekly ticket on the bus for around a tenner at the time when she was paying 25 quid or so for a five day rambler.

    Look, I'm not giving out to anyone here. Just making a general point. Happy Weekend!


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    #14
    Padraig Mor
    Registered Users Posts: 9,534 ✭✭✭Padraig Mor


    Public service staff also do not pay the pension levy on the cost, saving another 10/10.5% for most. Employers also do not pay employer's PRSI on the cost, saving them 10.75%.


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    #15
    Spanish Eyes
    Registered Users Posts: 15,865 ✭✭✭✭Spanish Eyes


    Padraig Mor wrote: »
    Public service staff also do not pay the pension levy on the cost, saving another 10/10.5% for most. Employers also do not pay employer's PRSI on the cost, saving them 10.75%.

    More information I didn't know! Thanks.


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    #16
    cython
    Registered Users Posts: 4,757 ✭✭✭cython


    lxflyer wrote: »
    To correct earlier posts, you save on tax (at your marginal rate), PRSI and USC.

    Go to www.taxsaver.ie and use the savings calculator there.

    Out of interest, and I'm not sure anyone here can confirm, but if you are in a position whereby you earn above the standard rate cutoff, but only by maybe 500 euro, do you save at your marginal rate or some blended rate since it is deducted from gross, and only part of what is deducted would have been levied at that marginal rate?

    As I said, it's an edge case, but one I'm curious about.


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    #17
    Mrs OBumble
    Registered Users Posts: 25,676 ✭✭✭✭Mrs OBumble


    It also depends on how much you use it. I go to and from work every day, but then make 2 extra journeys on average 3-4 times per week. (Home - gym - home, home-church-home, home-supermarket-home, etc) Saves me a fortune.


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    #18
    LXFlyer
    Registered Users Posts: 17,546 ✭✭✭✭LXFlyer


    cython wrote: »
    Out of interest, and I'm not sure anyone here can confirm, but if you are in a position whereby you earn above the standard rate cutoff, but only by maybe 500 euro, do you save at your marginal rate or some blended rate since it is deducted from gross, and only part of what is deducted would have been levied at that marginal rate?

    As I said, it's an edge case, but one I'm curious about.

    It totally depends upon your personal circumstances.

    Your salary (usually) will be reduced by a fixed amount each week/month as the cost of the ticket is recouped.

    You will need to do a mock payslip up for yourself.


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    #19
    cython
    Registered Users Posts: 4,757 ✭✭✭cython


    lxflyer wrote: »
    It totally depends upon your personal circumstances.

    Your salary (usually) will be reduced by a fixed amount each week/month as the cost of the ticket is recouped.

    You will need to do a mock payslip up for yourself.

    It's not my personal circumstances, as I'm not that close to any of these thresholds, but it's something that has occurred to me in the past when the blanket term of "marginal rate" is used, as that may not be strictly accurate in this case. As far as I can see if the deduction brings someone's pay from above one of the thresholds (probably the standard-rate cutoff would be the most common one) then a blended rate would kick in. It may be a fixed amount each week, but the deduction from the net pay seems like it should end up being between the two rates. I believe bike to work operates in this manner, so I'd imagine this should work in a similar manner.


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