Taxsaver Ticket Help

Lemlin

Was wondering if I could get some help on this. Started a new job near Docklands railway station in November. The cost of my train travel from the M3 Parkway to here is €29.30 per week with my Leap card.

I get five weeks holidays a year so if we say I work 47 weeks, that's €1377.10 a year.

I see that according to the tax saver website, an annual commuter rail ticket is €1460 with a saving of €744.60. Therefore it appears the real cost is €715.40.

What way does this work though. A deduction is taken from my salary of the full amount so essentially my basic pay will appear as €121.66 less before tax each month?

Am I right in thinking though the tax saver could save me €500-600 a year or am I missing some catch?

I am on the higher tax rate and any help would be greatly appreciated.

magicbastarder

generally, your employer would deduct it out of your gross pay; so your gross pay would fall by €1460 a year - but you'd see less than half of that anyway, so the true cost is your net pay on that €1460.

Lemlin

magicbastarder wrote: »

generally, your employer would deduct it out of your gross pay; so your gross pay would fall by €1460 a year - but you'd see less than half of that anyway, so the true cost is your net pay on that €1460.

Well Irish Rail seem to reckon that true cost is €715.40?

AlmightyCushion

Lemlin wrote: »

Well Irish Rail seem to reckon that true cost is €715.40?

The true cost depends on your tax rate. Someone on the higher rate of tax will save a lot, someone who pays very little income tax won't save much.

magicbastarder

Lemlin wrote: »

Well Irish Rail seem to reckon that true cost is €715.40?

well, if you're paying 51% tax on the earnings, 49% of €1460 (i.e. what you currently take home from those earnings) is €715.40. so that would be the cost to you to buy the ticket.

Lemlin

AlmightyCushion wrote: »

The true cost depends on your tax rate. Someone on the higher rate of tax will save a lot, someone who pays very little income tax won't save much.

I'm on the higher tax rate.,

markpb

AlmightyCushion wrote:

The true cost depends on your tax rate. Someone on the higher rate of tax will save a lot, someone who pays very little income tax won't save much.

Lemlin wrote:

I'm on the higher tax rate.,

It's not just your income tax rate that affects it. Your PRSI rate also plays a part.

Lemlin

markpb wrote: »

It's not just your income tax rate that affects it. Your PRSI rate also plays a part.

My PRSI class is A1?

Oiriallach

I think your employer would have to be participating in the scheme for you to benefit from the tax savings.

Lemlin

Oiriallach wrote: »

I think your employer would have to be participating in the scheme for you to benefit from the tax savings.

My employer are participating but if I want to go for the yearly ticket, they want to deduct it in two separate payments? That'd be €730 each time which is a bit steep.

Also, can anyone confirm if out to the M3 Parkway is included on the short hop commuter rail ticket? It doesn't mention it on the website.

Losty Dublin

Lemlin wrote: »

My employer are participating but if I want to go for the yearly ticket, they want to deduct it in two separate payments? That'd be €730 each time which is a bit steep.

Also, can anyone confirm if out to the M3 Parkway is included on the short hop commuter rail ticket? It doesn't mention it on the website.

Yes, M3 is within the short hop zone.

schemingbohemia

Your employer is out of step with most others by deducting it in 2 lump sums. Most deduct it either weekly or monthly. You will definitely save money but it's the cash flow issue for you that you have to decide upon.

Orion

Lemlin wrote: »

My employer are participating but if I want to go for the yearly ticket, they want to deduct it in two separate payments? That'd be €730 each time which is a bit steep.

Also, can anyone confirm if out to the M3 Parkway is included on the short hop commuter rail ticket? It doesn't mention it on the website.

Bear in mind that the actual cost to you will be €357.70 - as in that's all your net pay will be down. Seems a bit counter-intuitive to do it in two payments. Most employers I've heard of allow it monthly over 6-12 months.

Lemlin

schemingbohemia wrote: »

Your employer is out of step with most others by deducting it in 2 lump sums. Most deduct it either weekly or monthly. You will definitely save money but it's the cash flow issue for you that you have to decide upon.

They've offered to do it by three now so I'm going to avail of it from February.

It's a small company with about 50 employees so that is probably why.

ejabrod

I'm in the same boat (or train )

Trying to decide if the ticket will be worth it.

Again, on the higher tax bracket, highest USC, not sure of tax rate (currently A1)

Was working out the cost of travel from Clonsilla to Docklands:

€6.25/day x 5 days x 4 weeks = €125

Monthly Dublin Bus & Rail Short Hop ticket is €176 (Personal Leap Card)

I'm just not getting where the saving (for me) is

LXFlyer

ejabrod wrote: »

I'm in the same boat (or train )

Trying to decide if the ticket will be worth it.

Again, on the higher tax bracket, highest USC, not sure of tax rate (currently A1)

Was working out the cost of travel from Clonsilla to Docklands:

€6.25/day x 5 days x 4 weeks = €125

Monthly Dublin Bus & Rail Short Hop ticket is €176 (Personal Leap Card)

I'm just not getting where the saving (for me) is

Your gross pay is reduced by €176 - therefore you save on PAYE, PRSI and USC on that €176. That's where the saving is.

Go to this page:

http://taxsaver.ie/Commuters/How-much-can-I-save/

Also, remember that you can have unlimited use of the bus and train, so you could use it at weekends as well.

thomasj

Is there a reason you're including bus travel in the pass, especially as you're only counting the cost of train from Clonsilla to docklands?

ejabrod

Good point. Was including bus in case I miss trains home etc. Bus would only be one way in any given day (plus it was only €30 extra for the month )

ejabrod

lxflyer wrote: »

Your gross pay is reduced by €176 - therefore you save on PAYE, PRSI and USC on that €176. That's where the saving is.

Go to this page:

http://taxsaver.ie/Commuters/How-much-can-I-save/

Also, remember that you can have unlimited use of the bus and train, so you could use it at weekends as well.

I'm just not gettting it.

AlmightyCushion

ejabrod wrote: »

I'm just not gettting it.

The 176 is taken from your pre-tax pay so while it costs 176, some of that 176 would have been taken off you in taxes. The real cost to you is a lot less than 176.

magicbastarder

ejabrod wrote: »

I'm just not gettting it.

if you're paying tax at the higher rate, every euro less you earn is only a loss of 49c in reality for you - as you'd have paid the other 51c in tax and USC etc.

so if you're paying say €100 per month towards a bus ticket out of your gross, the actual cost to you is €49.

LXFlyer

ejabrod wrote: »

I'm just not gettting it.

OK - employer buys ticket for €176.

He then deducts that from your gross pay before calculation of tax, PRSI and USC, rather than from your net pay as with most other deductions.

That means that your pay prior to calculation of PAYE, PRSI and USC reduces by €176.

Therefore:

PAYE reduces by €176 * 40% = €70.40
PRSI reduces by €176 * 4% = €7.04
USC reduces by €176 * 5% = €8.80

Therefore, the net cost of the ticket to you becomes €89.76.

LXFlyer

Just to add - there is a monthly short hop zone rail only ticket for €146 if you don't need to use the bus.

Again, under the taxsaver scheme your employer buys the ticket and then deducts the €146 from your gross pay.

The tax savings in this case would result in a net cost to you for the ticket of €74.46 per month.

ejabrod

lxflyer wrote: »

OK - employer buys ticket for €176.

He then deducts that from your gross pay before calculation of tax, PRSI and USC, rather than from your net pay as with most other deductions.

That means that your pay prior to calculation of PAYE, PRSI and USC reduces by €176.

Therefore:

PAYE reduces by €176 * 40% = €70.40
PRSI reduces by €176 * 4% = €7.04
USC reduces by €176 * 5% = €8.80

Therefore, the net cost of the ticket to you becomes €89.76.

lxflyer wrote: »

Just to add - there is a monthly short hop zone rail only ticket for €146 if you don't need to use the bus.

Again, under the taxsaver scheme your employer buys the ticket and then deducts the €146 from your gross pay.

The tax savings in this case would result in a net cost to you for the ticket of €74.46 per month.

Thank you for simplifying this for me

I would probably go for the bus included due to not being sure of finishing times and locations.

Again, thank you very much.