CHAPTER 11 Understanding Payslips and Personal Tax


1.11 Interpret a wage slip and calculate personal tax liability arising from employment.


Gross pay Bonus Tax credit PayPath


Basic pay/ wage


PAYE Net pay


Overtime PRSI


Statutory deduction


Commission USC


Voluntary deduction


KEY SKILLS 1. Identify the elements of a wage slip.


2. Calculate gross pay including overtime, commission and bonus.


3. Distinguish between statutory and voluntary deductions.


CHAPTER 2 L.O.


1.2


4 12 31 32 1.4 1.12 3.5 3.6


4. Calculate PAYE, PRSI and USC. 5. Calculate net pay.


6. Explain what PayPath is and outline its advantages.


INTRODUCTION


When you start your first job, your employer will give you a wage slip every time you get paid. Your wage slip shows how much you earned and how much was deducted before you received your money.


Being able to understand your wage slip is important. It tells you whether you are being paid the correct amount, how much you are paying in taxes and what you are actually taking home after all deductions are made.


In this chapter we learn how to read a wage slip, how each figure is calculated, and what each deduction means.


CLASS ACTIVITY


Read each statement and decide whether it is True or False.


1. Gross pay is the amount an employee takes home after deductions.


2. PAYE, PRSI and USC are all examples of statutory deductions.


3. A tax credit reduces the amount of PAYE an employee has to pay.


4. Overtime is always paid at the same rate as basic pay.


5. PayPath means wages are paid directly into an employee’s bank account.


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LINKS COURSE


KEY WORDS


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