Tax credits and wages query

piobhan

Sooo, for this threads purpose, say my employer pays me a NET wage of say €500 per week and all my tax credits are assigned to that business.

What happen if I start to work somewhere else part time as well and want o split my tax credits, give 90% of them to my current employer and the other 10% to the part time employer. Will it cost my employer more to pay me the same net wage of €500 per week?

I’m not sure how tax credits work, thanks for you help.

Wheety

Your employer doesn't pay you a net amount. It pays gross and then deducts certain payments. So if you split your credits, your €500 from your main employment would no longer be €500.

scheister

piobhan wrote: »

Sooo, for this threads purpose, say my employer pays me a NET wage of say €500 per week and all my tax credits are assigned to that business.

What happen if I start to work somewhere else part time as well and want o split my tax credits, give 90% of them to my current employer and the other 10% to the part time employer. Will it cost my employer more to pay me the same net wage of €500 per week?

I’m not sure how tax credits work, thanks for you help.

If your employer pays you net which is rare. you moving your credits or bands will cost them more. A very loose calculation about €11/12 a week assuming the 90/10 split above

piobhan

scheister wrote: »

If your employer pays you net which is rare. you moving your credits or bands will cost them more. A very loose calculation about €11/12 a week assuming the 90/10 split above

It's a small SME and yes they just agreed to pay me a NET wage of X per week, say €500 to keep with this example.

So I think you answered my question, if I split my tax credits 90% to the full time job and 10% to the part time job, it will cost my full time employer more, roughly €15 per week to keep paying me a NET wage of €500. I just wanted to know so I don't P### them off to much, It's a small company. Thanks

CIARAN_BOYLE

if you change your tax credits don't assume they will keep the net agreement.

Wheety

I didn't know they agreed to pay you a net amount that's why I jumped in with my answer.

They probably had a gross figure in mind when they said you'd get €500 net. If I were your employer, I would not give you a pay rise to take on a second job.

allthedoyles

Can't understand why employers agree to this , but there ya go.

You don't have to split your tax credits but of course depends on earnings . You may be able to set up 2nd employer with zero credits @20% tax and you might be able to allocate some of your SRCOP to 2nd employer depending on your earnings in first employment .

make sure you get balancing statement after year end

piobhan

So Basically, I'll be clear. at the moment it's a NET wage of €600 per week from my main employer - an old school set up. They have all my credits as a single person.

The part time role would be approx 10 hours a week at €10 gross per hour. I've only worked there a couple of times and have yet to change my tax situation and haven't been paid by them earlier.

Sooo 2 questions??

If I did a split of my tax credits 90% to main employer and 10% to the part time company, how much extra would it cost the full time employer to maintain a NET payment of €600 per week???


Is that 90/10 % split the most tax efficient way of splitting my credits??


Thanks for all the help and advice

allthedoyles

€600 nett pay with full tax credits is as follows :

• Gross - 760.87
• tax - 108.00
• USC - 22.43
• PRSI - 30.43
• Nett Pay - 600.00

€600 nett pay with 10% reduction in tax credits :

• Gross - 773.27
• Tax - 119.31
• USC - 23.02
• PRSI - 30.93
• Nett pay - €600

Note employer will also pay extra €1.35 in ER PRSI

namenotavailablE

Worth being aware that if you don't transfer any of your standard rate band to the second job then it will be taxed at 40% on everything.

Here's the calculations for 'no transfer of credits' and 'transfer 10% of credits only (no standard rate band transferred)':






Source: My spreadsheet