Could someone explain BIK for company health insurance?

ajones

I'm working for a company that supply health insurance for me and my partner and I pay Benefit in Kind for this. So on my payslip it says

"Healthcare BIK - €X amount"

Does this mean that I am paying €X every month? And if so, is it before or after tax?

If I'm completely wrong, could someone explain to me, in simple terms, what actually happens with BIK in this situation?

barneystinson

ajones wrote: »

I'm working for a company that supply health insurance for me and my partner and I pay Benefit in Kind for this. So on my payslip it says

"Healthcare BIK - €X amount"

Does this mean that I am paying €X every month? And if so, is it before or after tax?

If I'm completely wrong, could someone explain to me, in simple terms, what actually happens with BIK in this situation?

The amount of healthcare they pay for you is notional pay, so its added to your actual pay and you are taxed on it, at the marginal rate.

You might also the notional pay amount subtracted somewhere else on your payslip, in arriving at your net pay.

ajones

Ok, so I'm not paying the BIK, I'm only paying the tax on that €X amount?

garbeth

If for example the insurance costs 100 euro per month this amount is added to your gross pay as if your employer gave you 100 euro on top of your existing salary

You are then taxed on the whole amount and then the 100 euro is taken back.

So it means you are paying tax on the 100 euro but not getting an extra actual 100 instead you get the benefit of health insurance.

ajones

Thank you! makes perfect sense now!