PS Pension Levy Calculation

Gumbo

Can anybody work out the pension levy figures for my salary?
i will provide it all by PM if required.

i was hit yesterday, and while we have no problems as such with it and doing our bit and all that etc etc, i realised i am payng €20 more than some people who would be earning maybe 5-6k more than me.

we are both on the higher rate of tax, but below 40k salary.

can anybody help me understand this?

thanks.

MoominPapa

Are you talking about the calculated levy or the effect on your net(take home pay)? If someone earns more than you then their calculated levy will be more, unless their pay is made up of levy exempt allowances which is very unlikely. However the tax they pay could be less then someone who earns less then them due to Standard Rate Cut off Points and Tax credits which are personalised and therefor their net could be higher.

Don't forget that the levy applies from the 1st March, so if you are paid weekly and your salary is payed in the current week you will pay the levy on all of your salary and allowances(if you are getting paid for overtime worked prior to the 1st this should be exempt). Your colleagues may be on a fortnightly payroll in which case only 9 days worth of their salary falls on or after the 1st of March so they may be charged less than you for the 1st pay cycle in which the levy is due but will be charged on the full amount subsequently.


Of course your payroll department could have f*cked up:pac:

Throw up some ball park figures if you like and I'll break down the calculation for you, might be of use to others

Gumbo

MoominPapa wrote: »

Are you talking about the calculated levy or the effect on your net(take home pay)? If someone earns more than you then their calculated levy will be more, unless their pay is made up of levy exempt allowances which is very unlikely. However the tax they pay could be less then someone who earns less then them due to Standard Rate Cut off Points and Tax credits which are personalised and therefor their net could be higher.

Don't forget that the levy applies from the 1st March, so if you are paid weekly and your salary is payed in the current week you will pay the levy on all of your salary and allowances(if you are getting paid for overtime worked prior to the 1st this should be exempt). Your colleagues may be on a fortnightly payroll in which case only 9 days worth of their salary falls on or after the 1st of March so they may be charged less than you for the 1st pay cycle in which the levy is due but will be charged on the full amount subsequently.


Of course your payroll department could have f*cked up:pac:

Throw up some ball park figures if you like and I'll break down the calculation for you, might be of use to others

salary is €39,873
no bonus, no overtime etc etc
paid forthnightly of 1529.38 gross

Mr.Applepie

http://www.ino.ie/DesktopDefault.aspx?TabID=6694

Google is your friend. I found this when working it out for my computer illiterate sister

MoominPapa

kceire wrote: »

salary is €39,873
no bonus, no overtime etc etc
paid forthnightly of 1529.38 gross

681.82 * 3% = 20.46
(909.09 - 681.82) * 6% = 13.64
(1529.38 - 909.09) * 10% = 62.03

Levy = 96.13

MoominPapa

Mr.Applepie wrote: »

http://www.ino.ie/DesktopDefault.aspx?TabID=6694

Google is your friend. I found this when working it out for my computer illiterate sister

I can't get that to calculate but if the labels are anything to go by its wrong for this year, but correct for 2010. The 2009 threshold is 18000 for 3% and 24000 for 6%. This is due to the levy being introduced during the tax year and not at the start

Gumbo

turns out that because i get relief at the lower tax scale (20%), the guy beside me who earns 7.5k more than me pays less of a levy than me!!!!

no problems with the levy as a way of helping out the economy but when it hits the lower paid workers first, then im fuming!

i know, it could be worse

MoominPapa

kceire wrote: »

turns out that because i get relief at the lower tax scale (20%), the guy beside me who earns 7.5k more than me pays less of a levy than me!!!!

Thats wrong, if he earns more than you his levy will be greater than yours, however his taxable pay will be reduced by a greater amount than yours. If hes paying less in tax than you then its down to his Std Rate Cut Off Point and tax credits.

Gumbo

MoominPapa wrote: »

Thats wrong, if he earns more than you his levy will be greater than yours, however his taxable pay will be reduced by a greater amount than yours. If hes paying less in tax than you then its down to his Std Rate Cut Off Point and tax credits.

thats what i was just told, i dont know what else i can do now!
he is deffo earning more, and is deffo paying less of a levy, i seen it with my own eyes!

MoominPapa

kceire wrote: »

thats what i was just told, i dont know what else i can do now!
he is deffo earning more, and is deffo paying less of a levy, i seen it with my own eyes!

Does your levy deduction match my calculation? If he is paying less than you then he is underpaying he'll have to pay the balance at the end of the year, employers are required to apply a balancing mechanism to all their employees at the end of the year or when they leave their employment. If you are being deducted that amount then you're alright so don't worry about him. The only reason I can think off, besides a payroll mistake, is that some of his pay relates to prior to 1st March

Gumbo

MoominPapa wrote: »

Does your levy deduction match my calculation? If he is paying less than you then he is underpaying he'll have to pay the balance at the end of the year, employers are required to apply a balancing mechanism to all their employees at the end of the year or when they leave their employment. If you are being deducted that amount then you're alright so don't worry about him. The only reason I can think off, besides a payroll mistake, is that some of his pay relates to prior to 1st March

no your wrong....its 96.12 ha ha

were all paid for the same period, there was no overtime carried out as there is no overtime permitted in our dept since a year or 2 ago.

MoominPapa

kceire wrote: »

no your wrong....its 96.12 ha ha

D'oh, so close...:D

Anyway, he'll have a chunk of cash taken off him, just in time for Christmas, if he doesn't get this sorted before hand

Gumbo

MoominPapa wrote: »

D'oh, so close...:D

Anyway, he'll have a chunk of cash taken off him, just in time for Christmas, if he doesn't get this sorted before hand

thanks for your help, i will keep an eye on it and compare it to our next payslip.

nesf

MoominPapa wrote: »

Thats wrong, if he earns more than you his levy will be greater than yours, however his taxable pay will be reduced by a greater amount than yours. If hes paying less in tax than you then its down to his Std Rate Cut Off Point and tax credits.

No, there is a point around the start of the higher tax band where people earning slightly more than another group pay a lower level after tax because they pay 41% tax on more income and effectively get a bigger part of their levy discounted at that rate.

It's the single biggest problem with the way they structured the levy (and exactly why they should have changed the percentages and taken it out of net rather than gross pay.

MoominPapa

nesf wrote: »

No, there is a point around the start of the higher tax band where people earning slightly more than another group pay a lower level after tax because they pay 41% tax on more income and effectively get a bigger part of their levy discounted at that rate.

The levy reduces your taxable income, relief is not applied to the levy. If
kceire collegues levy is less than kceires its wrong, his tax/prsi could be well down though

nesf

MoominPapa wrote: »

The levy reduces your taxable income, relief is not applied to the levy. If
kceire collegues levy is less than kceires its wrong, his tax/prsi could be well down though

I'm assuming what kceire calls the levy is the net effect since they may be comparing how much they've lost in take home pay. You are correct but it could be confusion over net/gross amounts.

MoominPapa

nesf wrote: »

I'm assuming what kceire calls the levy is the net effect since they may be comparing how much they've lost in take home pay. You are correct but it could be confusion over net/gross amounts.

Don't think so case he , almost, agreed with my calculation, so presumably his levy is shown in full, suppose it really depends on the payslip layout.
Anyway like you said if they just took reduced percentages from net there would be no confusion and it would be fair/er