Why is my health insurance BIK so high on payslip?

SG250 · 25-07-2022 06:41PM #1

I signed up for VHI health insurance via fully funded company plan and the BIK deduction on my payslip seems a little high.

The charge is 150 per month deducted from my gross income.

Given my marginal tax rate is 52% and the below is on my plan it doesn't make sense:

Total Premium: 258.81EUR

Period of Cover: 11/05/2022 - 31/07/2022

Or am I completely wrong about how it works.

relax carry on · 26-07-2022 02:19PM

BIK is the value of the benefit which is added to your gross pay. You are then taxed on your gross pay + the BIK amount. If the gross subscription you pay is roughly 260 euro per month and you are a higher rate tax payer then 52% of that amount equates to the tax you pay on the benefit received. Have a chat to your payroll section to ensure you understand the value of the benefit received and what you are being taxed on.

Green Mile · 26-07-2022 02:24PM

You can claim medical insurance tax credits when your company covers the cost of insurance.

Revenue will increase your tax credit allowance but you need to inform them. A lot of people dont know this.

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

Apply for it on your myAccount or give Revenue a call on 01 7383636

Why is my health insurance BIK so high on payslip?

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