Taxable Benefits-in-Kind Processed Through Payroll

You can process the benefits given to your employees through payroll to ensure statutory deductions are taken correctly for taxable benefits.

Calculation Cards - Organization

At the organization level, a new Benefits-in-Kind calculation card Information component is available.

Use this component to add the market rate that you offer for home loans and other types of loans. This is different from the rate offered to your employees.

These rates are used in calculations prescribed by the legislation to create cash equivalent amount of the loan. A new Taxable Benefits calculation card has been introduced with components available for each benefit type for data capture and subsequent processing in payroll runs.

Calculation Cards - Person

At the person level, there's a new Taxable Benefits calculation card with components for each type of benefit. To set up taxable benefits that need to be processed in payroll, enter the data required for each component, as needed. The components delivered are:

  • Benefits Calculation Information

    • Enter any protected pay value to be used

    • Enter how any arrears of statutory deductions should be collected for this person

  • Car  

  • Van

  • Preferential Loans

  • Medical Insurance

  • Dental Insurance

  • Assets Transferred

  • Use of Assets

  • Goods Provided

  • Accommodation

  • Furniture Provided

  • Subscription and Other Payments

  • Payments on Behalf of Employee

  • Staff Discounts

  • Staff awards

  • Vouchers

  • Miscellaneous.

Elements

The components are linked to the elements for benefits-in-kind and classified under the Taxable Benefits primary classification. A formula is attached to each element that calculates the cash equivalent of the given benefit.

The resulting elements for some of these benefits have additional input values that store information from the relevant calculations.

Balances

Each benefit type has its own balance.                                       

  • Car Benefit

  • Van Benefit

  • Preferential Loans Benefit

  • Medical Insurance Benefit

  • Dental Insurance Benefit

  • Assets Transferred Benefit

  • Use of Assets Benefit

  • Goods Provided Benefit

  • Accommodation Benefit

  • Furniture Provided Benefit

  • Subscription and Other Payments Benefit

  • Payments on Behalf of Employee Benefit

  • Staff Discounts Benefit

  • Staff awards Benefit

  • Vouchers Benefit

  • Miscellaneous Benefit

The cash equivalent calculated for each benefit is added to a new balance. The Gross Taxable Earnings and Notional Pay will be added together in the statutory deductions calculations of PRSI, PAYE and USC.

Apart from this, there are some other balances that have been introduced for the purpose of calculation, information, and reporting.

  • Notional Pay

  • BIK Employee Arrears PAYE

  • BIK Employee Arrears PRSI

  • BIK Employee Arrears USC

  • Notional Pay subject to PAYE

  • Notional Pay subject to PRSI

  • Notional Pay subject to USC

  • Notional Pay after Statutory Deductions

  • Notional Pay subject to PAYE for Gross up

  • Notional Pay subject to PRSI for Gross up

  • Notional Pay subject to USC for Gross up

Arrears processing

If during payroll processing, there's a possibility that an employee doesn't have enough pay to deduct the calculated statutory deductions on their taxable benefits. In such cases, these are stored as arrears in the arrears balances and you can recoup these as deductions, as required.

Gross Up of Benefit Paid Given as Net

You can give your employee a benefit as a net amount to be grossed up in the payroll run to ensure statutory deductions are taken. To do this, you can set up a Gross Up element. The payroll run will process this benefit and calculate the gross value as well as the amounts of statutory deductions.

Legislative Rates and Value Definitions

All the rates and value definitions needed to calculate the taxable cash equivalent of the benefit are according to the Irish legislation. 

You can process taxable benefits through payroll to ensure statutory deductions are calculated and applied to the cash equivalent value.

Steps to Enable

You don't need to do anything to enable this feature.