How do people feel about this one? Will it be short and sweet?
Mod warning:
https://www.boards.ie/discussion/comment/121425200/#Comment_121425200
How exactly is anyone getting -0.5% less than they were last year "in real terms"?
There is a seperate inflation clause that covers inflationary related re-negotiations.
We've talked about this....
9.25% nominal rise / 2.5 years = 3.7% gross nominal pay rise
minus paye, usc, prsi, pension levy
3.7×(1−0.4−0.085−0.04−0.105) =
1.369% net nominal increase
less ECB hoped for inflation rate 2%
1.369 −2 =
minus 0.631% real terms pay decrease per year
Yep...the longer you live you realise even otherwise intelligent people can be morons in some areas.
Thats honestly some of the most mental maths I’ve ever seen.
Your calculations are off there, because you're treating it as if the person doesn't pay any tax on their existing salary and will only pay it on the new part.
If you're trying to work out the net increase, you need to take account of the net pay in the first place.
Seeing as you have 0.085 for the USC, you are taking someone with gross income of over 70k/annum.
Using the example of an AP which I outlined a few pages back (Post #6307), an AP at Point 1 on the scale would have received €74737.46 (gross) in 2023. Under this new deal, they will earn €78175.97 (gross) in 2024. So this is an increase of 4.6% gross comparing 2023 to 2024. But what would the net pay be in each year? According to TaxCalc.ie (2023 Calculator), a public servant earning 74737 in 2023 would have had net income of 45836. According to TaxCalc.ie (2024 Calculator), a public servant earning €78175 (gross) in 2024 will have net income of 48053. This would represent an increase of 4.8% (or €2217).
Also, as people keep ignoring here, if you're going to compare with inflation, you need to compare with what someone (or more accurately, what the role) paid in 2023 vs what it will pay in 2024 under this deal, not what pay would have been in 2024 without a deal vs what it will pay in 2024 under this deal.
Edited to add URL to 2nd TaxCalc.ie (2024 calculator) link.
Just got my gas bill for Dec - Jan, last year it was €592, this year it was €594
We had that in the last deal and still ended up 6.5% down.
Got my pay slip today......new tax rates mean i get €16 extra a week.....social got extra €12 a week.....double payment as well this week.....
Tis a great wee country 😁😁😁😁
So you used more. I drove 200 kms yesterday. It cost me more than driving 100kms even though the diesel was cheaper. Duh.
A couple of posters mentioned that we need to take "budgetary measures" into account i.e. take a below inflation pay rise, why exactly?
First off the tax changes are just indexing bands and credits, which really they should be obliged to do so every year anyway. Not doing so would be a stealth tax rise
Secondly, why would a tax cut (not that it's a cut in real terms) be taken into account when looking at pay, when tax rises never are?
Disingenuous nonsense
Missing the point entirely, what a surprise.
You are talking about energy price cuts, some cuts to gas and electricity have been announced but these cuts don't yet exist, they don't kick in until 1 March, and guess what happens to my heating energy usage from then on?
For all the blather about energy price cuts, the 2023-24 winter period will have been no cheaper than last year's.
Petrol and diesel went up this week at all of my local filling stations...
If inflation is 2% and adjustments in the budget are made so that your net pay increases 2%, you hardly have a claim for a 2% pay rise (i.e. 4% net in the end). Its disingenuous to argue you do have a 2% claim.
In my opinion, budget adjustment have to be taken into account. That includes when it goes the other way. It doesn't have to be as blunt as I do it as you may want to consider pension etc.
But when people get a pay rise to counter inflation, they are no better off but end up paying more tax. That's why bands and credits have to be indexed to avoid stealth tax rises.
Hence why I referred to net.
Im up 1.75% net with the recent take changes. To argue that shouldn’t be taken into account doesn’t make sense to me.
I get your point and that’s why taking it as bluntly as I have also isn’t correct. I get a 4% rise this year, the net increase for me is something like 3.2%. You’re (if I’m reading correctly) looking at the 0.8% differential there.
Surely the 0.95% can and should be factored in in my case? It will be highly dependent on individual numbers but it’s a case study.
thanks for that, figures were calculated on average across 2.5 years
looking at your figures - total pay increase for 2024 is 4.25% (headline figure spread across year)
the net change for worker outlined in your post (using 4.25%)
is (47036 - 45836) = 1200/45846 = 2.6% before e.g. 2% inflation or up 0.6% for 2024
however headline "pay rise" drops to 3% in 2025, 2% in 2026 so on average acorss 2.5 years workers are down in real terms about minus 1.5% across 2.5 years (some years they are up e.g 0.6% 2024 some year workers will be down e.g. 2025 and 2026)
Where are you getting 47036 from?
The net income for 2024 under the proposed pay deal will be 48053, meaning an increase of 4.8% on the net pay in 2023.
The "headline" figure of 4.25% is a red herring, because for gross pay you need to compare 2023's gross total (74737.36) with 2024's gross total (78175.00), which is an increase of 4.6%.
Point 1 on the AP scale in 2024 will pay 4.6% gross and 4.8% net more than the same point in 2023.
Wait; are you actually eating what Donoghue was shovelling, with regard to tax changes need consideration and pay deals?
Or am I mistaken completely?
To expand further on this, here are my calculations for what the pay deal will look like for Point 1 on the AP scale between 2023 and 2026.
The "Net Change YoY" assumes no change in tax credits / tax rates in Budget 2025 or Budget 2026 for our Point 1 AP.
The "Alternate Scenario Net Change YoY" assumes €500 change in tax credits / tax rates in each of Budget 2025 and Budget 2026 (e.g. higher rate band increase from €42000 -> €44000 in Budget 2025 and then €44000 -> €46000 in Budget 2026, along with €50 increases in both Personal Tax Credit and PAYE Tax Credit in each of Budget 2025 and Budget 2026. These alternate scenario would be less than what was delivered in Budget 2024 (€40000 -> €42000 higher rate band increase and €100 change in each of Personal Tax Credit and PAYE Tax Credit).
It must also be noted that 2026 assumes no increase after the increase on June 1st. This would suggest a period of over 6 months (July 1st to December 31st) without an increase after the expiry of this proposed pay deal, which would be at odds with what has occurred with this proposed pay deal (2.25% increase on Day 1 of new deal). It would also be contrary to the start of this proposed pay deal, which sees an increase of 2.25% on Day 1, just 3 months after the final pay increase of the previous deal (1% on 01/10/2023).
where are you getting gross increaes of 4.6%, 3.28% and 2.43% for 2024-2026 from
the nominal pre tax etc. and pre inflation rises are
4.25%, 3% and 2% i.e. 9.25% across 2.5 years
I have not seen what Pascal said. It’s my own opinion.
If you think the two events should never been considered together, we disagree.
There is the breakdown of what this pay deal means on a month-by-month basis for Point 1 on AP scale.
As you can see, the gross pay for 2024 will be 4.6% higher than 2023.
The gross pay for 2025 will be 3.28% higher than 2024.
The gross pay for 2026 (assuming no further increases between 01/06 and 31/12) will be 2.43% higher than 2025.
I, honestly, don't believe you now. The ONLY person/people promoting that idea are Paschal and cronies.
In no world does an employer get to point to government tax breaks as a remuneration benefit.
I'm done with this crap now, if we're to the point of government tax breaks forming part of employer pay deals.
JFC
Our employer is the government and the argument being made is we should track inflation. We don’t negotiate individually. It’s a bit different.
The budget adjustments don’t really make a material difference to lower paid workers, they get a higher percentage. Those over get less but benefit from the changes in the budget.
Fair enough if you disagree. Just my opinion. If you want to call me a FG crony, go for it but I’ve never voted for any of the three parties in government.
How many times does it need to be said before it'll sink in?
Let's say your tax credit was €1000 as of Budget 2022
Inflation over the next 12 months was 5%
In Budget 2023 your tax credit is increased to €1050.
I never said tax cut so I’m not sure why you’re yelling it. I’ve said budget adjustments.
In the scenario you describe, do you think that person has a credible argument for a 5% pay rise?
Thats what that poster does when you dont agree with them. I understand you and agree with you.
Of course
The purpose of the 5% tax credit rise is to protect the value of the 5% wage rise. All in line with inflation so leaves the worker no better off than before, but no worse either.
I haven't abused anyone on this thread, you can't say the same unfortunately.
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