Why is my Nett pay less in my new job?

i124Q

Payslip 1 (LEFT SIDE): Current job, 68k salary, Healthcare and Dental care taxable (345.19+38.47)*, contributing to pension at (8%) 453.33.

*for healthcare & dental, our premium is taxable to you. It may be possible to claim Tax Credits for this benefit by following the instructions from the Tax Revenue

Payslip 2 (RIGHT SIDE): Previous job, 64k salary, allowance of 600 to put towards healthcare...etc, contributed to pension (6%) 316.20.

I contacted the payroll team internally and they said it was due to the 77469.15 Gross pay (bottom left of Payslip 1). "You are taxed on this accumulative income, which means as the fiscal year progresses, and you accumulate more income, most likely you will be taxed also accordingly."

I have checked 3 online calculators to check what my net income should be and the average of all 3 is 3900+ euros. This is what is leading me to believe my Nett should be more?

Online Calculators:

1. https://download.pwc.com/ie/budget-2024/income-tax-results.html?status=1&parentstatus=0&ageattained=33&prsicategory=1&grossincome=on&grosssalary=68000&pensionfund=on&yrpensioncontrib=453&tradeincome=on&welfarepension=on&investmentincome=0&rentincome=0&salary3=0&remoteworking=on&remoteworkingspouse=on&mortgageinterestpaid=&covehicle=on&healthinsure=on&healthbik=345&healthadult=2&healthchild=1&clubbiksel=0&otherbiksel=1&otherbik=38&employerloan=on&submit=Calculate+my+tax

2. https://salaryaftertax.com/ie/salary-calculator

3. https://ie.thesalarycalculator.co.uk/salary.php

Am I getting taxed more because I'm earning more? I am really confused as to why my Net is 500 less a month.

namenotavailablE

There are a couple of points to note:

• the settings you used for the calculator from PWC seem to only deduct a pension of €453- that's only 1 month's pension contribution so it's over-estimating your net pay. You need to check what you've inputted for that calculator in respect of your pension. The same comment applies to the BIK value you've used in the calculator.
• your old job paid a monthly cash gross of €5870. Your new job pays €5667 plus a non-cash benefit-in-kind of €384 per month. You're taxed on the BIK value, which costs you about €193 in PAYE, PRSI and USC per month. As your payroll office states, you can claim a tax credit against this BIK (the amount of the credit depends on who the health policy covers between adults and children).
• your deductions include the €193 in extra tax as well as the non-cash gross BIK value (the gross BIK is added to cash earnings to get the tax amount but as you don't receive the BIK into your bank account, it has to be deducted from your gross.
• You're no longer having to pay your own Dental and Medical premium out of your monthly net pay so that represents a pretty significant monthly saving which you'd need to take into account when comparing old v new.
• the extra pension deduction (€453-€316= €137) is costing you 60%, or €82 per month.

Using your new job's annual pay, BIK and tax credits/ cut-off data values (note that these latter two values aren't the normal amounts- they are lower than expected, possibly because a tax underpayment is being collected from previous years e.g. tax on pandemic payments?), my spreadsheet [downloadable at taxcalc.eu/monthlyss but won't work on Excel for mobile or for Mac] tallies with the new job's net pay calculation.

i124Q

Thank you so much for the info, that is so helpful. Oh yes I entered the details again in the pwc calculator, this time in yearly amounts, and it does come down to 3500 or so.

I will put in a claim ASAP for the BIK stuff. If that is 193ish plus the 2% extra pension I'm contributing at roughly 113 (2% of 68k / 12), then that accounts for 300ish euros (a month) I lost sight of, comparing to previous job.

Any advice on how often I should claim the BIK from revenue?

Thanks again!

namenotavailablE

See here for the claim process (for 2023 you'll need to submit a tax return online [easy to do]):

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/health-and-age/medical-insurance-premiums/index.aspx

i124Q

Why does my employer not just pay my health and dental outright from their accounts? Am I truly getting it for 'free' this way? Is this what most companies do?

namenotavailablE

It's not free. The way it works is as follows (and this is the correct procedure):

• Your employer pays the insurance company directly, so you now have insurance cover.
• The cost to you is the 'tax cost' [PAYE/PRSI/USC] that's charged on your payslip (the €193 per month).
• You can reduce this tax cost by going through the tax credit reclaim procedure as detailed above.

So, effectively, instead of paying the full cost of the insurance out of your net take-home pay, you're paying the tax cost, or getting your insurance at roughly half price. It's a really good feature of a pay package- the thing to remember is that you aren't paying anything out of your bank account for health insurance.

nhg

To claim Medical Insurance tax relief you will need to submit a copy of the policy to Revenue to ensure you are getting the correct tax credit based on your annual premium:

Adult up to max €1,000 (€200-tax credit)

Child up to max €500 (€100 - tax credit)