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2010 Budget-Tax makes no sense

  • 12-03-2010 5:26pm
    #1
    Kellzer
    Registered Users Posts: 43 ✭


    I am after getting a couple of pay cuts and currently am earning 28000euro a year. Just realised that the 4% Health Levy is applied to your entire salary if you earn more than 500per week(ie26000 per year), but you are not charged this levy if you earn less than 26000. This means that anyone earning between 26001-27450Euro will have a lower take home pay than someone on 26000. For me on 28000, I am paying 87%tax on the 2000Euro above the 26000. Seems ridiculus to me! Checked this with an accountant I know who works in payroll for a different company and he said he came to realise this when he gave an employee a small pay rise that resulted in a net pay cut!
    What genius came up with this system?


Comments

  • #2
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    Kellzer wrote: »
    I am after getting a couple of pay cuts and currently am earning 28000euro a year. Just realised that the 4% Health Levy is applied to your entire salary if you earn more than 500per week(ie26000 per year), but you are not charged this levy if you earn less than 26000. This means that anyone earning between 26001-27450Euro will have a lower take home pay than someone on 26000. For me on 28000, I am paying 87%tax on the 2000Euro above the 26000. Seems ridiculus to me! Checked this with an accountant I know who works in payroll for a different company and he said he came to realise this when he gave an employee a small pay rise that resulted in a net pay cut!
    What genius came up with this system?

    yep its a total mess, especially if you are self employed, there's quite alot of these "traps" which actively discourage working more

    tho apparently it will be all simplified with a "social solidarity tax" next year


  • #3
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    ei.sdraob wrote: »
    yep its a total mess, especially if you are self employed, there's quite alot of these "traps" which actively discourage working more

    tho apparently it will be all simplified with a "social solidarity tax" next year

    I was under the impression from Lenihans post budget comments that the tax changes would be made before this summer


  • #4
    Nody
    Moderators, Category Moderators, Arts Moderators, Business & Finance Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 18,337 CMod ✭✭✭✭Nody


    Kellzer wrote: »
    What genius came up with this system?
    If I remember correctly France has it on it's normal tax system where as soon as you breach a given tax level you pay that tax on your full salary. This of course means that if you just go over it your net pay becomes less then before the raise!


  • #5
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    Deleted User wrote: »
    I was under the impression from Lenihans post budget comments that the tax changes would be made before this summer

    Hhmm I read somewhere that it wont be till 2011 until they sort this mess by rolling up all the charges and levies into one

    but if it comes sooner then all the better, and easier to understand tax system aint a bad thing


  • #6
    Riskymove
    Registered Users, Registered Users 2 Posts: 10,899 ✭✭✭✭Riskymove


    Deleted User wrote: »
    I was under the impression from Lenihans post budget comments that the tax changes would be made before this summer

    tax changes require a budget


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  • #7
    changes
    Closed Accounts Posts: 959 ✭✭✭changes


    What sort of donkeys have we got in charge with glaring anomalies like the OP mentions.

    Another really unfair one is the motor tax. If your well off enough to afford a 2008, 2009 or 2010 car then you get to pay road tax based on emissions. But the poorer members still have the pay the old system which just happens to be more expensive.


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