How much is an annual bonus taxed?

armabelle

Let's say I am single and earn a mid-range salary in Ireland of 75 000 euro and my annual bonus is 5000 euro. Should I be taxed 40% of the annual bonus?

From what I read online. In Ireland, all earning above 33000 should be taxed @ 40% so my net bonus should be 3000 right?

thank you

armabelle

armabelle wrote: »

Let's say I am single and earn a mid-range salary in Ireland of 75 000 euro and my annual bonus is 5000 euro. Should I be taxed 40% of the annual bonus?

From what I read online. In Ireland, all earning above 33000 should be taxed @ 40% so my net bonus should be 3000 right?

thank you

Plus PRSI @4% plus USC @8% - you will get 48% back.

FYI 75k is far from a mid range income - it is more than double the average wage.

cdeb

I don't think 75k is a mid-range salary, but anyway.

You've also got to pay USC @ 8% (the rate for income above 70k) and PRSI @ 4%, so you'll be taxed at 52%. Take home would be 48%, or 2400.

Advbrd

armabelle wrote: »

Let's say I am single and earn a mid-range salary in Ireland of 75 000 euro and my annual bonus is 5000 euro. Should I be taxed 40% of the annual bonus?

From what I read online. In Ireland, all earning above 33000 should be taxed @ 40% so my net bonus should be 3000 right?

thank you

Your bonus is effectively earnings and is subject to the same deductions: tax, prsi etc. Some companies have an approved profit sharing scheme which is tax exempt in which you are allocated shares in the company. You can save a few bob this way if your company has such a scheme but your bonus is locked away for three years and the value is dependent on share price. No use to you if such a scheme does not exist.

armabelle

Deleted User wrote: »

Plus PRSI @4% plus USC @8% - you will get 48% back.

FYI 75k is far from a mid range income - it is more than double the average wage.

thank you!

Yes, I suppose if you consider what the majority of people earn then it is an above-average wage.

However, if you consider what life in Ireland costs (rent, heating, electricity, childcare, food etc) it is a very fair amount to sell your life for.

IMO the majority of people in Ireland are underpaid but that is a separate topic

armabelle

cdeb wrote: »

I don't think 75k is a mid-range salary, but anyway.

You've also got to pay USC @ 8% (the rate for income above 70k) and PRSI @ 4%, so you'll be taxed at 52%. Take home would be 48%, or 2400.

Thank you

are you taxed 8% only on what you earn above 70K? So in this case, on 10K (75K annual wage + 5k bonus) or are you taxed 8% on the entire 80k?

cdeb

8% above 70k. 5.5% is the lower band, and there's lower ones again down to 1%.

(Technically, it's a monthly allowance - so above 5833 (or whatever 70000/12 is) per month.)

I don't agree Irish people are underpaid at all; we seem to forget that we're historically a poor country (now a bankrupt one) that doesn't even really produce anything much any more, but that's a different thread.

mcko

I get about the same annual bonus but we have a company share scheme where you can invest your bonus in company shares, if you keep them for 3 years you only pay Capital Gains on any profit from the sale.
I know that the Revenue are not allowing many schemes to open but it would be an idea to say it to the company, if you have a union then it is a good perk to look for.

armabelle

cdeb wrote: »

8% above 70k. 5.5% is the lower band, and there's lower ones again down to 1%.

(Technically, it's a monthly allowance - so above 5833 (or whatever 70000/12 is) per month.)

I don't agree Irish people are underpaid at all; we seem to forget that we're historically a poor country (now a bankrupt one) that doesn't even really produce anything much any more, but that's a different thread.

I don't know how somebody can live a decent life on the average Irish wage. Underpaid, High wage, low wage are all relative terms. For me personally, the average wage in Ireland is low. But then again if we compare to poorer countries then we could say that the average wage is not so bad. There is always someone poorer and someone wealthier than you so hard to define anything. In the end we put our own price on our heads

Anyways, back OT. So If I earn 75k, for PRSI, I would only get taxed 8% on the 5k and 5.5% on the first 70k?

bee06

You're getting USC and PRSI mixed up. It's USC that is charged at different bands. The below link gives you the USC bands and the applicable % charged.

http://www.revenue.ie/en/tax/usc/

cdeb

armabelle wrote: »

I don't know how somebody can live a decent life on the average Irish wage. Underpaid, High wage, low wage are all relative terms. For me personally, the average wage in Ireland is low.

Ah, tis yourself, Peewee!

armabelle

bee06 wrote: »

You're getting USC and PRSI mixed up. It's USC that is charged at different bands. The below link gives you the USC bands and the applicable % charged.

http://www.revenue.ie/en/tax/usc/

you're right, cheers for correcting me

so if I look on the chart for 2016 to which my enquiry relates, on 75 k

€12,012 would be taxed @ 1%
€6,656 would be taxed @ 3 %
€51,376 would be taxed @ 5.5%
€4956 would be taxed @ 8%

and the bonus of 5K would be taxed @ 8% too right?

thanks!