payback.ie
http://paybackieforum.azurewebsites.net/

Pensions, PRSI and USC - 2011
http://paybackieforum.azurewebsites.net/viewtopic.php?f=3&t=119		 Page 1 of 1
Author:  eamon [ ]
Post subject:  Pensions, PRSI and USC - 2011
There seems to be some confusion about how PRSI is calculated for Pension contributions. Employee PSRI contributions are liable to Employer PRSI.
This document outlines how pension contributions should be treated for PRSI:
http://www.revenue.ie/en/practitioner/e ... 62011.html

Quote:
This eBrief addresses the treatment of employer contributions to an employee’s PRSA. Since 1 January 2011, employee contributions to a PRSA are chargeable to PRSI – fully chargeable in the case of the employee and 50% chargeable in the case of the employer.


Some payroll software companies may have been given bad advice by the PRSI Scope Section to include employer PRSA contributions in the computation of PRSIable Gross Pay. This has resulted in some payroll products calculating an overpayment of PRSI. In response to this, the Revenue issued a notice to employers with the following text:
Quote:
NOTICES TO EMPLOYERS ON ABOLITION OF EMPLOYER PRSI CHARGE ON SHARE-BASED REMUNERATION and PRSI INCORRECTLY PAID ON EMPLOYER CONTRIBUTIONS TO AN EMPLOYEE’S PERSONAL RETIREMENT SAVINGS ACCOUNT (PRSA).


To clarify, Payback has always correctly calculated employer's PRSI for pensions.


Example:
Pensionable pay = 1000.00
Employee contribution = 50.00
50% of employee contribution = 25.00

Amount liable to employer PRSI = 1000.00 - 25.00 = 975.00
Employer PRSI = 10.75% of 975.00 = 104.81
(Employee PRSI = 34.92)
Author:  eamon [ ]
Post subject:  Re: Pensions, PRSI and USC - 2011
Section 1.16 of the November 2011 USC FAQ Deals with PRSAs(http://www.revenue.ie/en/tax/usc/univer ... e-faqs.pdf)
According to a Revenue representative, the employee should pay USC BIK on the pension:

Quote:
Your question is answered in 1.16. The employer contribution is not liable to USC, but if he is paying it on behalf of the employee which is treated as a benefit in kind then USC is applied.


So to set this up in Payback is easy enough.
1. Go to the employee screen.
2. Note the employer pension contribution. (you'll be able to see this from the payslip)
3. Set up a new element called PRSA USC BIK (or something like that)
4. Put the Employer Pension contribution as the amount
5. Click the 'More>>' button at the top right of the elements grid, to display more columns.
6. Under the 'Type' column in the elements grid, select 'BIK'
7. Tick USC, and untick PRSI and Tax.
The row should look like:

Code:
Description    Amount     Type  Tax  PRSI   USC   Pens   Hols   G.Up
PRSA USC BIK       50      BIK   No    No   Yes     No    Yes     No

(Where the employer contributes €50)

8. Click 'Update Employee' at the top of the employee screen.
Page 1 of 1 All times are UTC
Powered by phpBB® Forum Software © phpBB Group
http://www.phpbb.com/