To handle Disability Benefit for Irish payroll when the employer pays the employee and the employee gives the cheque(s) to the employer.
N.B. Social Welfare payments are not subject to Income Levy
The Payroll Administrator need to set up three new pay elements:
-
Disability Addition Taxable – Gross Addition, subject to Tax but not PRSI
-
Disability Deduction Taxable – Gross Deduction , subject to Tax and PRSI
-
Disability Addition Net – Net Addition, subject to neither Tax nor PRSI
First Six Weeks or 39 Working Days:
-
Salary / Basic paid as normal
-
Amount of Disability cheque entered as a Gross Deduction
-
Amount of Disability cheque entered as a Net Addition
Result: Disability portion not Taxed or subjected to PRSI. Employer only pays PRSI on difference
After Six Weeks
-
Salary / Basic paid as normal
-
Amount of disability Cheque entered as a Gross Deduction
-
Amount of disability Cheque entered as a Gross Addition, subject to Tax but not PRSI
Result: Disability Benefit Taxed, but not subject to PRSI
To handle Disability Benefit when the employer pays the employee and the employee keeps the cheque(s) .
The Payroll Administrator needs to set up four new pay elements
-
Disability Addition Taxable – Gross Addition, subject to Tax but not PRSI
-
Disability Deduction Taxable – Gross Deduction, subject to Tax and PRSI
-
Disability Addition Net – Net Addition, subject to neither Tax nor PRSI
-
Disability Deduction Net – Net Deduction, subject to neither Tax nor PRSI
First Six weeks or 39 working Days:
-
Salary / Basic paid as normal
-
Amount of Disability Cheque entered as a Gross Deduction
-
Amount of Disability Cheque entered as a Net Addition
-
Amount of Disability Cheque entered as a Net Deduction.
Result: Disability Portion not Taxed or subject to PRSI. Employer only pays PRSI on difference
After Six Weeks
-
Salary / Basic Paid as normal
-
Amount of Disability Cheque entered as a Gross Deduction
-
Amount of Disability Cheque entered as a Gross Addition, subject to Tax but not PRSI
-
Amount of Disability Cheque entered as a Net Deduction.
Result: Disability Benefit Taxed, but not subject to PRSI