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VAT off of Commision

  • 26-11-2009 4:22pm
    #1
    Seniorpeazel
    Registered Users, Registered Users 2 Posts: 97 ✭✭


    HI Folks,

    Looking for advice here.

    My girlfriend is working for a small shop.
    She is entitled to commission but only over a certain amount of earning (lets say 200), also she is not being paid through the books which she is trying to sort out first of all... but my query is as follows:

    If she sells 400euro of products, she is entitled to 10% commission on 200 of this... what her employer is doing is taking the 200euro deductin 21.5% for VAT (200 X 21.5%) And then giving her the 10% of this total.

    Is this the correct way to be deducting the VAT?

    Also is this correct that the employer is taking VAT off of the earnings when she is not being paid through the books so not paying tax.

    Any help would be much appreciated.

    SP
    Tagged:


Comments

  • #2
    mickbyrne
    Closed Accounts Posts: 164 ✭✭mickbyrne


    VAT should be deducted by dividing the €200 by 1.215 which would give a net sales of €164.61. It would be correct and the norm to calculate commissions on the net sales not gross. I assume that the employer is paying the VAT to the revenue.

    The fact that she is not being paid through the books is a separate and serious issue.


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