how much tax to add on

solway

Hi everyone, im a person working off a C2 and im in the middle of pricing a big plastering job. I was just wondering how much tax will i have to add on to my employees wages. Lets say i was paying them 500 a week net pay(take home pay). How much will i have to add on to calculate their gross.They are all single and living at home.
1 other person i will have to employ is married with 3 kids and i will have to pay him 650 a week so what will his gross work out at roughly.
Thanks any help would be great

barneystinson

solway wrote: »

Hi everyone, im a person working off a C2 and im in the middle of pricing a big plastering job. I was just wondering how much tax will i have to add on to my employees wages. Lets say i was paying them 500 a week net pay(take home pay). How much will i have to add on to calculate their gross.They are all single and living at home.
1 other person i will have to employ is married with 3 kids and i will have to pay him 650 a week so what will his gross work out at roughly.
Thanks any help would be great

Firstly, IMHO, you're thinking about this in the wrong way, and paying staff a pre-agreed net pay is only likely to cause hardship for you.

How much their pay will gross up to will depend on what credits / standard rate cutoff is assigned to their employment with you, and you can only know that once you register them as your employee and Revenue inform you what these amounts are. These figures will in turn be dictated by what other job(s) these guys have, or whether or not they are / were on jobseekers benefit before starting with you.

So unfortunately there's no simple answer to your question - if I were you I'd agree a GROSS figure with them, and make the proper deductions, and if at the end of the year they are owed a refund then they can get it from Revenue.

tenchi-fan

+1 to barneystinson

My brother went into business for a while and agreed to pay a guy €600 a week TAKE HOME PAY!

This was in the days of labourers who "wouldn't get out of bed for less than €120 a day - cash". Too bad for my brother that he tried to do everything by the book but didn't have any business savvy. Needless to say when tax time came he didn't stay in business very long.

Nevermind whether your workers living at home or married or have kids. This isn't any of your concern. You could inadvertently be discriminating against married workers by paying them a lower gross wage due to their marital status, leaving yourself open to being sued.

just quote them a pre-tax wage, say €600 gross, get their statement of tax credits and standard rate cut-off points, and use it to calculate the guys' take-home pay.

tenchi-fan

Play around with this tax calculator: http://www.deloitte.ie/tc/

But don't make assumptions. They could have all their tax credits allocated to their spouse, or they could have worked earlier in the year. Emergency tax your employees until you get you their statement of tax credits.

namenotavailablE

I also have a spreadsheet which can do this (net-to-gross calculation- see the 'Other tools' sheet of the spreadsheet): http://taxcalc.eu/monthlyss.

However, there are real risks with using any of the free calculators (mine included). For example, you'd need to know if the person has used up some/ none of his annual tax credits; as noted above, you'd also need to know the annual credits; you might also need to know if they have received certainb welfare benefits (for example, in certain circumstances, Jobseeker's Benefit is taxable, or the possession of a full medical card impacts on the calculation of the Universal Social Charge).

I'd strongly advise that you get proper payroll software- while I'm pretty happy with the accuracy of my calculator, I don't know if I've covered EVERY single angle in my own calculator so there could be errors. Likewise, the other online calculators tend to rely on a series of simplifying assumptions which could throw your answer.

For a single person employed for the full year and with totally standard tax credits and cut off data (and no medical card or other income at any stage of the year), a weekly gross of €606.31 (assume no pension or other deductions) will give a weekly net of €500 [PAYE €57.80, PRSI €19.17, USC €29.34].

solway

Thanks for all the replies. Im not looking for their gross/nett pay to the nearest cent. How am i to price a job if i have to worry all the things that were mentioned (medical cards,married, is spouse working or not, tax credits,standard rate cut off points etc. etc. I have to come up with a price for the builder and i have to have myself covered tax wise and pension wise in that price. What im gathering from the replies is that i cant calculate someones nett to gross or gross to nett because i dont have a clue what way their own tax affairs are. If i pay a man 1000e gross he will surely take home between 600-700e per week. Married/single. I have to come up with some sort of a figure in my head to calculate a price for the job. What im gathering from the replies is to agree a gross with the employees i have in mind and whatever way the cookie crumbles for them after that is their own tough luck.

Alan Shore

You need to give this more consideration.

As the previous posters have said you should not agree a net pay. You are involved in the construction industry so you are covered by the registered employment agreement.

http://www.labourcourt.ie/labour/labour.nsf/lookuppagelink/HomeRatesOfPay
You are obliged to register with the CWPS and pay into it.
€17.21 x 39 so €671 gross is a good start. Add on the employers pension and 10.75% Employers PRSI

angelfire9

If you agree a net pay with a lad that is married there is nothing to stop him giving all his tax credits & his SRCOP to his wife and leaving you screwed

But seeing as you only seem to need this info for costing a job then I would state (from experience in preparing BOQ's)

ASSUMING FULL TAX CREDITS FOR ALL THE FOLLOWING:

For a single worker with no kids to come out with a nett of €500 per week will cost you €671.53 per week or €17.22 per hour (based on a 39 hour week)

A single person with children will cost you €602.58 per week or €15.91 per hour (€500 nett 39 hour week)

A married person will cost you €861.40 per week or €22.09 per hour to give him a NETT of €650 per week

Calculations attached



I would suggest that you either

A) Do NOT pay your staff on a nett pay basis as it might be discriminatory because marital status and children affect the cost to you per hour


Agree a Nett wage based on full tax credits being allocated to their employment with you and if they are not willing to do this then you give them a fixed gross per week


C) Give all your employees the same set gross per week for all of them (if they are all equally qualified and experienced) as their marital status and their kids (if they have kids) are not your problem!

NOTE:
AS stated above you have to sort out pension deductions as well but as far as I can see from here: http://www.cwps.ie/rates/ this will add €31.27 per week per employee to your costs

barneystinson

solway wrote: »

Thanks for all the replies. Im not looking for their gross/nett pay to the nearest cent. How am i to price a job if i have to worry all the things that were mentioned (medical cards,married, is spouse working or not, tax credits,standard rate cut off points etc. etc. I have to come up with a price for the builder and i have to have myself covered tax wise and pension wise in that price. What im gathering from the replies is that i cant calculate someones nett to gross or gross to nett because i dont have a clue what way their own tax affairs are. If i pay a man 1000e gross he will surely take home between 600-700e per week. Married/single. I have to come up with some sort of a figure in my head to calculate a price for the job. What im gathering from the replies is to agree a gross with the employees i have in mind and whatever way the cookie crumbles for them after that is their own tough luck.

Bingo. The only way you can fix the cost from your perspective is to agree the gross wage, add on employer's PRSI and CWPS contributions.

solway

Thanks everyone.

solway

Hi barneystinson, when calculating employer prsi @ 10.75% what way does it work.
I have a payslip from a person who is starting with me in a few days. This payslip is from his former employer. It says he has a gross of E800 and after all deductions has a nett of 536.17.Total deds of 263.83 which i think are very high. Heres a run down. paye 54.64 prsi 26.92 usc42.90 cwps 20.31 cwps2 2.51 which =147.28. Its from here where i cant work it out. it seems the employer cwps contribution of 31.78 and employer prsi of 84.77 are also deducted from his gross. So.........

paye 54.64
prsi 26.92
usc 42.90
cwps 20.31
cwps2 2.51
er prsi ctb 84.77
er cwps 31.78
__________
263.83-800 gross=536.17

I always thought that the employer pays the er prsi @ 10.75% on the gross of the ee and also that the employer side of the cwps contribution is paid by employer. It looks to me that everything is lumped into the employee gross and deducted. Please correct me if im wrong but......

barneystinson

solway wrote: »

Hi barneystinson, when calculating employer prsi @ 10.75% what way does it work.
I have a payslip from a person who is starting with me in a few days. This payslip is from his former employer. It says he has a gross of E800 and after all deductions has a nett of 536.17.Total deds of 263.83 which i think are very high. Heres a run down. paye 54.64 prsi 26.92 usc42.90 cwps 20.31 cwps2 2.51 which =147.28. Its from here where i cant work it out. it seems the employer cwps contribution of 31.78 and employer prsi of 84.77 are also deducted from his gross. So.........

paye 54.64
prsi 26.92
usc 42.90
cwps 20.31
cwps2 2.51
er prsi ctb 84.77
er cwps 31.78
__________
263.83-800 gross=536.17

I always thought that the employer pays the er prsi @ 10.75% on the gross of the ee and also that the employer side of the cwps contribution is paid by employer. It looks to me that everything is lumped into the employee gross and deducted. Please correct me if im wrong but......

I won't correct you because you're spot on, that guy's former employer has ripped him off if the figures as you quote them are correct, and arguably they owe him a lot of money (€106.55 per week for however many weeks that setup went on...). I'd be very interested to see that P45 actually..!

thesimpsons

Fully agree with you that it looks like employer was pulling a quick on on that employee. There is no way employee should be paying the ER PRSI and ER PRSI. They are supposed to be employer costs not deducations from the wages. I'm constantly amazed at how little people know about their own tax situations.

slave2kids

OMG what a cowboy!!
I would be straight on to revenue and hang him out to dry...........

ssbob

solway wrote: »

Hi everyone, im a person working off a C2 and im in the middle of pricing a big plastering job. I was just wondering how much tax will i have to add on to my employees wages. Lets say i was paying them 500 a week net pay(take home pay). How much will i have to add on to calculate their gross.They are all single and living at home.
1 other person i will have to employ is married with 3 kids and i will have to pay him 650 a week so what will his gross work out at roughly.
Thanks any help would be great

If I were you I would just sub the work to these people.................much easier and it is a one off contract so no chance of their being an employee/employer contract.

barneystinson

ssbob wrote: »

If I were you I would just sub the work to these people.................much easier and it is a one off contract so no chance of their being an employee/employer contract.

That's just not true, if a person is an employee then they are an employee, the duration of their employment is irrelevant. (http://www.revenue.ie/en/tax/rct/determining-the-correct-employment-status-of-a-worker.html)

The OP is asking about specific people he intends to employ, these aren't self employed contractors, so it's safe to assume they don't have their own insurance, aren't going to be supplying materials etc... and are unlikely to want the hassle of having to register as self employed for the sake of one contract with the OP.

solway

Ya true,these employees dont want to go self employed for approx 2 months work.