Calculate gross pay for each of the following: 38 hours @ €10 per hour 39 hours @ €9.50 per hour
40 hours @ €12 per hour plus 4 hours overtime @ time-and-a-half
LO 1.1 1.2 1.11
2. What taxes do people have to pay? Did you know?
In Ireland, people pay taxes: (a) on their income (b) on their spending (c) on their assets
Most people do not receive all the gross pay that they earn. Instead, they have to pay tax on their income, as well as on their spending and on many of their assets. The Revenue Commissioners is the State Agency responsible for collecting taxes on behalf of the government. Anyone found not paying the tax they owe will have to pay large fines and interest on the tax owed. In some cases, non-payment of tax can result in a jail sentence.
122
(a) Taxes on income Income Tax is a tax on a person’s earnings. Pay As You Earn (PAYE) is the name of the Irish system used to collect income tax from employees’ gross pay. It is called a progressive tax system because the more you earn, the more you pay in tax. All employers must register with the Revenue Commissioners for PAYE. They must deduct the correct tax from their employees’ wages before they are paid and then send the money collected to the Revenue Commissioners. Anyone who is self-employed (runs their own business) pays similar taxes but they are collected differently under a self-assessment system. The Universal Social Charge (USC) is an additional tax payable on gross income. Pay Related Social Insurance (PRSI) is a compulsory insurance payment to the State. PRSI is calculated as a percentage of gross income. Payment of PRSI entitles employees to: - Jobseeker’s benefit - Contributory old-age pension - Maternity benefits - Sickness benefit, when temporarily out of work - Other social welfare and health benefits
