Why is health insurance taxed?

Pooinloo · 27-12-2019 05:45PM #1

If an employer is nice enough to provide health insurance, why should an employee pay tax on that? Shouldn't employer's covering health insurance be encouraged?

Padre_Pio · 27-12-2019 05:47PM

Pooinloo wrote: »

If an employer is nice enough to provide health insurance, why should an employee pay tax on that? Shouldn't employer's covering health insurance be encouraged?

Health insurance has a monetary value, therefore it's taxed same as any other payment that has a monetary value (with some small exceptions)

Allinall · 27-12-2019 05:47PM

Pooinloo wrote: »

If an employer is nice enough to provide health insurance, why should an employee pay tax on that? Shouldn't employer's covering health insurance be encouraged?

It’s no different to an employer giving you an extra €1,000 to enable you to get your own health insurance.

Why wouldn’t it be taxed?

Pooinloo · 27-12-2019 05:48PM

Allinall wrote: »

It’s no different to an employer giving you an extra €1,000 to enable you to get your own health insurance.

Why wouldn’t it be taxed?

It's very different. It's safeguarding your health. It's not a bonus scheme.

Allinall · 27-12-2019 05:50PM

Pooinloo wrote: »

It's very different. It's safeguarding your health. It's not a bonus scheme.

So is buying your own health insurance.

SEPT 23 1989 · 27-12-2019 05:53PM

Another scrounger thread

Pooinloo · 27-12-2019 05:54PM

Allinall wrote: »

So is buying your own health insurance.

Of course it is, but you're completely ignoring the point of a person having something purchased for them, and then being penalised.

starbaby2003 · 27-12-2019 05:55PM

You can claim tax relief on it. €1000 per adult and €500 per child

Pooinloo · 27-12-2019 05:55PM

SEPT 23 1989 wrote: »

Another scrounger thread

How is it a scrounger thread?

Stark · 27-12-2019 05:57PM

There was a time when the BIK tax was fully offset by the medical insurance tax relief (which was at whatever rate you paid). The socialists successfully lobbied against that saying it was unfair on those who only paid tax at standard rate so the relief was reduced to 20%. They've been lobbying for the same for pension tax relief, thankfully no success there so far.

Pooinloo · 27-12-2019 05:58PM

starbaby2003 wrote: »

You can claim tax relief on it. €1000 per adult and €500 per child

Nope it's 20% of 1000 per adult, and 20% of 500 per child.

starbaby2003 · 27-12-2019 06:00PM

Pooinloo wrote: »

Nope it's 20% of 1000 per adult, and 20% of 500 per child.

That’s what I meant sorry.

Pooinloo · 27-12-2019 06:01PM

Stark wrote: »

There was a time when the BIK tax was fully offset by the medical insurance tax relief (which was at whatever rate you paid). The socialists successfully lobbied against that saying it was unfair on those who only paid tax at standard rate so the relief was reduced to 20%. They've been lobbying for the same for pension tax relief, thankfully no success there so far.

That's the problem with the 'they have a lollipop and we don't' brigade. They really care about getting a lollipop, it's more about taking from people who already have one.

Allinall · 27-12-2019 06:03PM

Pooinloo wrote: »

Of course it is, but you're completely ignoring the point of a person having something purchased for them, and then being penalised.

And you’re ignoring the point that it’s no different than your employer giving you the money to purchase it yourself.

Pooinloo · 27-12-2019 06:04PM

Allinall wrote: »

And you’re ignoring the point that it’s no different than your employer giving you the money to purchase it yourself.

So by that logic, shouldn't we be taxed on stationary, food or other perks that a company might provide?

Ten of Swords · 27-12-2019 06:08PM

Pooinloo wrote: »

So by that logic, shouldn't we be taxed on stationary, food or other perks that a company might provide?

You don't own the stationary, the company does

Free lunch is not a taxable benefit in kind provided it is offered to all employees

Allinall · 27-12-2019 06:08PM

Pooinloo wrote: »

So by that logic, shouldn't we be taxed on stationary, food or other perks that a company might provide?

You are taxed on any perks that you’re employer provides, if they’re not used exclusively for your job.

beejee · 27-12-2019 06:11PM

Pooinloo wrote: »

So by that logic, shouldn't we be taxed on stationary, food or other perks that a company might provide?

It's different because someone said so!

We aren't the worst country for taxation, but it's little consolation when you live here and not Zambia.

The more encompassing, intricate and complex taxation becomes, the more it encourages ducking, dodging, weaving and plain cash dealing.

Where they get you by the twiddly bits is the area of essentials like health care and provision. But even so, stay floating like a butterfly

Pooinloo · 27-12-2019 06:12PM

Allinall wrote: »

You are taxed on any perks that you’re employer provides, if they’re not used exclusively for your job.

That's not necessarily true, you pay alot of tax for a company car, which is only given if it's needed for work.

mcgucc22 · 27-12-2019 06:13PM

starbaby2003 wrote:

Thatâ€™s what I meant sorry.

I forgive you.

27-12-2019 06:15PM

Pooinloo wrote: »

That's not necessarily true, you pay alot of tax for a company car, which is only given if it's needed for work.

No not necessarily, sometimes cars are a perk of a job with the BIK tax paid depending on the business milage.

Allinall · 27-12-2019 06:17PM

Pooinloo wrote: »

That's not necessarily true, you pay alot of tax for a company car, which is only given if it's needed for work.

If you only use it for work- I.e. don’t take it home with you, then there’s no tax on it.

Pooinloo · 27-12-2019 06:20PM

Topgear on Dave wrote: »

No not necessarily, sometimes cars are a perk of a job with the BIK tax paid depending on the business milage.

Yup, and the taxation rates are extortionate. For example if you drive 24000 in a €30000 car, you'll be liable for around 10k on the year.

Idioteque · 27-12-2019 06:35PM

Pooinloo wrote: »

If an employer is nice enough to provide health insurance, why should an employee pay tax on that? Shouldn't employer's covering health insurance be encouraged?

How does it not encourage an employer to provide it? The employer doesn't pay the tax.

If an employee decides to not avail of the benefit, they'll most likely still pay a lot more to buy private health insurance themselves.

It's a win-win for the employer, they get to offer insurance which is generally an expected benefit from prospective employees. For those employees that don't want to avail of it that's fine too.

28-12-2019 12:05PM

Pooinloo wrote: »

Yup, and the taxation rates are extortionate. For example if you drive 24000 in a €30000 car, you'll be liable for around 10k on the year.

10 grand a year tax bill ?

893bet · 28-12-2019 01:25PM

Pooinloo wrote: »

Nope it's 20% of 1000 per adult, and 20% of 500 per child.

If your employer is paying your insurance on your behalf (on pay slip) then do you automatically get relief and it’s factored in or do you need to claim it separately?

Stark · 28-12-2019 01:26PM

You need to claim separately.

Duke of Url · 28-12-2019 01:29PM

If your company is paying your health insurance, I dont think you can claim tax back on it.

893bet · 28-12-2019 01:52PM

Stark wrote: »

You need to claim separately.

So let’s say my company pays 2500 for me and my family per year.

Net cost to me is circa 1250 per year as that’s what’s deducted from me via the taxation system from my salary.

I can claim separately 20% on that 2500? How can I do this?

blackwhite · 28-12-2019 02:09PM

Pooinloo wrote: »

Yup, and the taxation rates are extortionate. For example if you drive 24000 in a €30000 car, you'll be liable for around 10k on the year.

No - if the business mileage is less than 24k km p.a. AND the car is available throughout the year for personal use also AND all running costs associated with the car are paid by the business, then the taxable benefit would be €10k, and the tax liability would be a max of €5,200.

If you do more 24000km for business purposes then the BIK assessable is reduced further.

Either way - tax is only liable if the car is also available for personal use - and €5200 is the guaranteed annual cost. No fuel to pay for, no insurance, tax or maintenance. And of course, not having to pay to buy the car in the first place.

Had a company car for nearly 10 years, absolute bargain compared to having to own and pay for one myself

blackwhite · 28-12-2019 02:12PM

893bet wrote: »

So let’s say my company pays 2500 for me and my family per year.

Net cost to me is circa 1250 per year as that’s what’s deducted from me via the taxation system from my salary.

I can claim separately 20% on that 2500? How can I do this?

The 20% is reduced from the price you pay to the insurance company.

If your company has paid €2,500 then the actual insurance cost is €3,125. The insurance company gets the €2,500 from you/your company, and the remaining 20% (€625) is paid by Dept of Finance from your taxes

Why is health insurance taxed?

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