You give an employee a taxable benefit valued at €110. The employee pays Income Tax at 40%, PRSI at 4% and Universal Social Charge (USC) at 4.5% on the benefit.
See Also
Ireland - Individual - Other taxesHow Much Does an Employee Cost You?Paying social insurance (PRSI)What is PAYE?The Pay As You Earn (PAYE), PRSI and USC for €110 will add 51.5% to the value: 100% - (40% + 4% + 4.5%) = 51.5%. The grossed-up amount is €110 x 100/51 = €213.59.
You must pay:
| Income Tax | €213.59 @ 40% | €85.44 |
| Employee PRSI | €213.59 @ 4% | €8.54 |
| USC | €213.59 @ 5% | €9.61 |
| Employee's total liability | €103.59 | |
| Employer PRSI | €213.59 @ 10.85% | €23.60 |
You deduct the employee's tax liability (€103.59) from the grossed-up amount (€213.59). The balance is €110 (the original benefit value).
Payroll software will do the grossing-up for you in most cases.
