When it comes to understanding your payslip sometimes it can be very confusing but what I am hoping to do here is to demystify it all.
Payslips can look different from company to company but in general, they tell you the same thing and are broken into four main categories. They are
- Who you are and who is paying you
- What money you have coming in
- What money you have going out
- Totals for the year and your tax credits and allowances summary.
1. Who you are and who is paying you.
This is often across the very top of the payslip and is details like your PPSN and that of your employers. In simple terms, this is just a number with a letter at the end that identifies you on the revenue and social welfare system.
This section will also often detail what dept you work in and your internal id such as your staff number.
2. What you have coming in
In this section, which is usually on the left, you have details of what you are being paid. But don’t get carried away because this is your gross wages i.e. what you are getting before tax and anything else is taken out of it.
In general, in this section you have all the money coming in but there can be exceptions to this. For example, sometimes you will see a pension contribution come out of this side.
This is because pension contributions are tax-deductible (i.e. you get tax relief on them) and therefore some of the software that is used often deduct things like pension contributions from your gross wages before working out your tax.
This is what we like to call “pay yourself first”
3. What you have going out.
This is often on the left of the payslip and will deduct all the things to be taken off you before you get paid. They include things like
Income tax/PAYE this is just straightforward tax, the money the government take off you to run the country, pay for hospitals etc. (supposedly anyway)
USC – this was once the income and health levy but is now just a tax and is supposedly used for the same thing as above. It is the universal social charge was supposed to be temporary, but I think it is like a permanent temporary type thing now!!!
PRSI – This is Pay Related Social insurance and unlike taxes, this money is more like an insurance policy and pension contribution. It pays out when you retire (hopefully but we could do a whole piece on that item!) but it also pays you if you are off sick from work. It is often seen broken down between employer and employee contribution and your employer usually pays more than you do.
Subscriptions – if you have given written permission to pay for any subs like union fees etc you will see them come out here. This is also where you might see deductions for work sports and social or Christmas/holiday funds.
Overpayments or corrections – sometimes if you see a deduction here it may because you were overpaid in the past and your employer is taking it back off you or it could be if you damaged or broke something and you are not being hit with a charge to replace it. Employers need to give you notice of this.
LPT – if you pay your land property tax through your payroll you should see it come out here.
4. Totals for the year
This is where you can find some little gems. It will detail how much you are being paid today “current period” but also have much you paid so far this year under “YTD”. But it will also detail how much tax, USC and PRSI you have paid this year.
The gems, however, lie in the tax credits and allowances. Your “cut off point” is the amount of money you can earn before moving into the higher rate of tax. Sometimes your taxes can be out of kilter, for example, if you have moved job or you had some time off.
A quick check is to take the cut off point for this period and work it out for the year. So if you are paid weekly multiply it by 52, in 2019 a single person has a cut-off point of €35,300 so when you multiply it out if yours is less than this get on to revenue.
People who are overpaying taxes often never claim them back, there are lots of companies out there who specialise in doing personal tax returns and depending on which one you listen to, they claim that people who go to the bother of doing a tax return get a refund, on average between €800 & €1200.