Advice needed on taxation of holiday pay

mjg

Hi,

Can someone advise me please? I am on the lower 20% rate of tax and I have almost all of my holidays still to take.

This is a job that I started in January and I was told that I could hold off on my holidays until the end of the year and get paid for them in one lump sum. I think that I'll get hammered by the taxman if I do this though. Is this correct? What kind of % would I be looking at?

I've been trying to find the answer on the net but I'm crosseyed between descriptions of tax credits etc.

Thanks

M

Mr. Incognito

The way tax works is that you are taxed on 20% up to your standard rate band and 42% there after.

On top of this you have the health levy and the income levy.

Without knowing your salary can't really give you a computation or say what % you will be taxed at.

Your credits are divided by 12 and applied to every month's pay (if you are paid monthly). They are deducted from the tax charge and you pay the balance.

Oh and don't forget PRSI, lol.

Holidays typically work out about 1 and a half days per month I think off hand- it's 20 days for the year anyway.

mjg

Thanks Mr I.

I remember a time when I got this whole tax band thing, the neurons are starting to fire again on it.

I just need to take a look at a payslip this evening.

namenotavailablE

I've created a spreadsheet (download at taxcalc.eu/monthlyss) which might help you to calculate your net pay under different scenarios.

Email me at the address in the spreadsheet if you need to check anything about how to use it.