Can someone calculate wages

giz1

Hi I have 2 girls covering my work while I take few weeks off for maternity I usually have no employees so don't have a payroll package and I'm not 100% what deductions i need to make..
Both are single 19 yrs old so just standard taxes rates
Girl no 1 gets 300 take home
Girl no 2 gets 130 take home
I would very much appreciate if someone could give me the brake down of what i need to pay in relation to paye. Prsi both employee and employer. Usc and if any other taxes
Thanks in advance for all help

Squatter

giz1 wrote: »

Hi I have 2 girls covering my work while I take few weeks off for maternity I usually have no employees so don't have a payroll package and I'm not 100% what deductions i need to make..
Both are single 19 yrs old so just standard taxes rates
Girl no 1 gets 300 take home
Girl no 2 gets 130 take home
I would very much appreciate if someone could give me the brake down of what i need to pay in relation to paye. Prsi both employee and employer. Usc and if any other taxes
Thanks in advance for all help

1. Income Tax. The normal PAYE credit for a single person is €3300 p/a or €63.46 a week. What that effectively means is that an employee must earn over €317 a week before they are liable to pay any PAYE.

2. PRSI On a weekly wage below €352 a week, 0% of PRSI is payable by the employee, however the employer must pay 8.6%

3. USC Rate of USC on the first €12,012 of earnings is at - 0.5%, for the next €7,360 the rate is- 2.0%. Also if the annual income is below €13001, then no USC is payable.


Girl 1.

You are giving her €300 in hand each week, so you need to gross that up in respect of PAYE, PRSI and USC.

She won't be liable for PAYE (her weekly tax credit covers her) or PRSI (her weekly pay is below €352) and her USC will be at 0.5%.

Payslip should look like this:-

Gross pay: €301.50
less:
PAYE €0
PRSI €0
USC €1.50

Net pay: €300.00 (Note that you are liable to pay employer's PRSI @ 8.6% on that €301.50)


Girl 2.

You are giving her €130 in hand each week, so you need to gross that up in respect of her PAYE, PRSI and USC.

She won't be liable for PAYE (weekly tax credit covers her) or PRSI (weekly pay below €352) or USC here I'm assuming that her yearly income will be below €13,000

So her payslip should look like this:-

Gross pay: €130
less:
PAYE €0
PRSI €0
USC €0

Net pay: €130 (Note that employer's PRSI of 8.6% of €130 is payable)

Please note that this is a quick and simple calculation that disregards cumulatives and assumes that neither girl has had previous employment in this calendar year. But it should help you to get a a handle on what to do!

As a matter of interest, have you registered with Revenue as an employer?
https://www.revenue.ie/en/employing-people/becoming-an-employer-and-ongoing-obligations/registration-of-employers-for-paye-purposes/index.aspx

Bubbaclaus

Your obligation is to deduct what Revenue tell you to deduct from them in the P2C. If you haven't received that info, then you must apply emergency tax.

Bubbaclaus

Your obligation is to deduct what Revenue tell you to deduct from them in the P2C. If you haven't received that info, then you must apply emergency tax.

giz1

Thank you for that I have registered both wit ros I just wanted to know what payments I'll have to make in case I forgot anything and filed wrong thank you again

Glass fused light

First thing you need to do is make sure that you have you have employers liability insurance.
Then establish that both can be employed. Even if they are Irish you should take a copy of their passport and PPS number as part of your HR file. They both should be taxed on an emergency basis until you get the tax certs back from revenue. You need to supply both with terms and conditions of employment and a weekly payslip.
This is one of the items that It may be cheaper to ask your accountant for a price to run the payroll through their systems or contact a local payroll bureau for a price.

giz1

Sorry for all the clueless questions but I just checked my ros account and looked up the p2c file for both 1 has credits and cut of points and start date i imputed but the other has nothing listed for bands . Rate or cut off and start date as day i filed not start date i entered anyone know why i filed both at same time with same information

allthedoyles

Normally on take home of 300e - USC is 2.59e and employers prsi will cost 26.02e per week.



Of course tax and USC all depends on the employees personal circumstances , so work off the tax credit cert for each employee .

relax carry on

giz1 wrote: »

Sorry for all the clueless questions but I just checked my ros account and looked up the p2c file for both 1 has credits and cut of points and start date i imputed but the other has nothing listed for bands . Rate or cut off and start date as day i filed not start date i entered anyone know why i filed both at same time with same information

If the P2C has zero credits and rate band then the gross pay for that employee is subject to the highest rate of tax and USC. If the employee wants it altered they can do so through their online account as it's all pretty much self service now.
The resins for to can even vari d but it could be another employment on file. This is pretty much the reason why you shouldn't agree nett pay with employees; you never know their tax situation until confirmed by Revenue.

namenotavailablE

The correct solution depends entirely on their tax bands/ thresholds as noted above. My spreadsheet shows the following:

IF 'Girl 1' has a "typical single person's" tax profile, the gross pay would be €302.59 per week, no PAYE would be deducted and no employee PRSI. USC per week would be €2.59 and employer's PRSI would be €26.02 per week.

IF 'Girl 2' has a "typical single person's" tax profile, the gross pay would be €130 per week, no PAYE, employee PRSI or USC would be deducted. Employer's PRSI would be €11.18 per week.

However, as relax_carry_on noted, if one of the girls doesn't have a standard tax profile and all her earnings from the employment should be charged tax and USC at the emergency rates- this would result in a different answer for how much the various deductions would be!

allthedoyles

Employers / employees agreeing take-home pay is rampant nowadays especially in the construction industry .
Paye modernisation is not going to change this . It is been dictated by the employers accountants .

Victor

allthedoyles wrote: »

It is been dictated by the employers accountants .

Why would accountants recommend such a stupid idea?

Bubbaclaus

allthedoyles wrote: »

Employers / employees agreeing take-home pay is rampant nowadays especially in the construction industry .
Paye modernisation is not going to change this . It is been dictated by the employers accountants .

Why would an accountant recommend a pay agreement where the costs will be completely unknown until you get the P2C? Also could be easily manipulated by the employee simply adjusting their credits and bands online.

I think you are confused and are actually referring to accountants wanting self employed contractors (no payroll withholdings and a saving of employer PRSI). These contractors still have to pay tax themselves through their tax return on the 'pay' they receive.

allthedoyles

There are contractors out there that simply agree take-home pay with casual short-term employees.
These ones let their accountants sort out the gross to nett.

Bubbaclaus

allthedoyles wrote: »

There are contractors out there that simply agree take-home pay with casual short-term employees.
These ones let their accountants sort out the gross to nett.

So they have no idea what the cost to the business will be and leave themselves open to manipulation by the employee? Sounds too ridiculous to be true.

allthedoyles

Bubbaclaus wrote: »

So they have no idea what the cost to the business will be and leave themselves open to manipulation by the employee? Sounds too ridiculous to be true.

The OP in this thread has confirmed it to be true