payback.ie

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



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:


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)

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:



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:


(Where the employer contributes €50)

8. Click 'Update Employee' at the top of the employee screen.