1. Gross pay — what you earn from your employer
- Gross pay elements as agreed in your contract (e.g. salary and car/health/insurance allowances.
- Other items such as overtime and any notional pay for benefits-in-kind (BIK). Examples of BIKs include a company car or medical insurance (if the company pays on your behalf).
- Plus share gains, which are technically a subset of BIKs.
If you believe that the information in this section of your payslip is inaccurate, you should raise your concern with HR.
2. Statutory deductions — what the tax authorities collect
- PAYE: this is income tax that is deducted by your employer using Revenue’s PAYE system.
- USC: This is payable on your gross income if it is more than €13,000 annually.
- Employee PRSI: this is sometimes called ‘social security’ or ‘social insurance’ and is deducted from your earnings.
- Employer PRSI: this is not deducted from your earnings; it is a cost borne by your employer. It is payable on your earnings and collected through the PAYE system.
- LPT: this will be shown on your payslip if you pay your LPT as a deduction at source/from your salary.
3. Voluntary contributions/deductions — what you pay for through payroll
- Any deductions from your pay, such as medical insurance or share schemes.
- Your pension contributions, whether to an occupational scheme or through a Personal Retirement Savings Account (PRSA).
- Contributions to the Cycle to Work Scheme, travel passes, sports and social etc.
4. Net pay — how much you get paid
Net pay is the total amount you are paid after statutory and voluntary deductions. This amount of money will be transferred to your bank account on your pay date. It is also known as your ‘take home pay’.
5. Additional information — the small print
Employees often overlook the bottom part of the payslip, but important information is listed there:
- PRSI Class: it is generally Class A if you are an employee under 67 years old. Your PRSI class is important as it determines how much PRSI you pay and what benefits accrue to you from the PRSI paid.
- PRSI weeks: the number of weeks in the year where PRSI is payable on your earnings. This is important because your entitlement to future benefits will depend on how many PRSI weeks (often referred to as ‘stamps’) you have on record.
- Tax basis: this could be cumulative, week one, month one or emergency. If your deductions are higher (or lower) than you expected, the reason usually relates to your tax basis. Cumulative is generally the correct basis (depending on circumstances).
- Standard Rate Cut-Off Point (SCROP): this is the amount of your earnings that are taxed at the standard rate of tax (currently 20%) before the balance is taxed at the higher rate of tax (currently 40%).
- Tax credits: these reduce the tax you pay and are allocated by Revenue based on your personal circumstances, which you have informed Revenue of (e.g. married/single).
Revenue will issue a Tax Credit Certificate (or Revenue Payment Notification) for each employee with tax credits, SRCOP and tax basis (whether you are on emergency tax or a normal basis, for example). Your employer must calculate/process your payroll in accordance with this information. If the details are incorrect, you must contact Revenue and request amendments. Amendments will take effect on a ‘going forward’ basis.
Conclusion
Your payslip helps you understand your deductions and benefits. It illustrates how much you are being paid and allows you to raise any issues with HR or Revenue. Your pay is important; your payslip is too!
We are here to help you
PwC’s Payroll Solutions team supports organisations with all kinds of payroll queries, opportunities and problems. If you want to organise an information session for your employees about understanding your payslip, or if you would like to discuss your payroll, contact us today.
