Is it legal to tax non-cash bonuses?

Corruptedmorals

In the store I work in, every year we get christmas vouchers for the store, I'm not sure exactly how they work it out- usually earnings for the year relating to hours worked or something. Anyway, since it's not cash, can it be taxed? My original amount was 422, what I'm getting is 361. My actual pay for the week was 243, not enough to have either the levy or PRSI taken off me. However, it was added to the voucher amount, so I got both of them taken off the whole amount as well- but surely that's acting as if it's cash, which it isn't! Obviously pleased to get a bonus, just a bit annoyed that they were taxed €60 and then I got taxed further €63...doesn't seem right.

sold

Corruptedmorals wrote: »

In the store I work in, every year we get christmas vouchers for the store, I'm not sure exactly how they work it out- usually earnings for the year relating to hours worked or something. Anyway, since it's not cash, can it be taxed? My original amount was 422, what I'm getting is 361. My actual pay for the week was 243, not enough to have either the levy or PRSI taken off me. However, it was added to the voucher amount, so I got both of them taken off the whole amount as well- but surely that's acting as if it's cash, which it isn't! Obviously pleased to get a bonus, just a bit annoyed that they were taxed €60 and then I got taxed further €63...doesn't seem right.

Vouchers are benefit in kind, and as such are taxed, But smalled vouchers (up to 200 euros in a year) are not taxed.

Welcome the the real world.

namenotavailablE

...small vouchers (up to 200 euros in a year) are not taxed.

I think the annual allowed value is €250, not €200

To the original poster:

If your total income for the year including the taxable voucher is under €26000 you should be able to get a refund of any Health Contribution you paid.

See the heading "Possible refund of health contribution" on this page

mickbyrne

Any gift above 200 euro is taxable.

Niall_G

In general all income is taxed. There is an exemption for a single bonus, paid by voucher, up to 250 in any year. It only applies to the first payment in the year and, if the amount is over 250, none of it is exempt. In your case, you would have been better off getting a voucher for 250 (exempt) and the balance (which would be taxed) in cash. However, for the way it was actually paid, the tax treatment seems correct.

To avoid doubt, here is the exact Revenue guidance:
"The €250 small benefits relief is a yearly small benefits relief and applies to a one off benefit not exceeding €250 during the year. If an employer gives each employee one single €250 voucher in the year, the value of the voucher can be disregarded for PAYE/PRSI purposes. If the employer gives two vouchers worth €100 each, the value of the first voucher may be disregarded but the value of the second voucher has to be included as notional pay for PAYE/PRSI purposes. If the employer gives one voucher for €350, the value of that voucher (the entire €350) must be taken as notional pay."

supermedic

I wonder if anyone could answer me on this issue. I have just received some arrears for a qualification award that I have been due for a number of years. The company have deducted the Income levy from the gross figure even thought the arrears are from the years 2007 and 2008, which was pre levy. I see that the revenue.ie website says it depends on when you were paid , not when the money was earned, but if my employer had its act together and paid me when i was due it , i would not have had to pay the levy.....any thoughts ???

mickbyrne

As you have picked up from the revenue website, employment taxes are calculated based on when the money was paid not earned.

supermedic

So how come I paid tax at the 2007 - 2008 rates and did not have to pay the pension levy or the new pay cut rates ??

Mr. Incognito

s you have picked up from the revenue website, employment taxes are calculated based on when the money was paid not earned.

Actually this is incorrect. If you have a look at your tax legislation in the footnotes on PAYE it states that payments are taxed in the year to which they relate not when they are paid.