Deductions
BEFORE PROCEEDING PLEASE READ THE FOLLOWING SCREEN CAREFULLY.
THIS IS ONE OF THE MOST IMPORTANT SECTIONS ON THE PAYROLL SOFTWARE. THE INFORMATION YOU ENTER FOR EACH EMPLOYEE WILL DETERMINE THE PAYE, PRSI & USC THEY WILL PAY DURING THE TAX YEAR.
DEDUCTIONS
The following section facilitates the set up of deductions i.e. Pension, Union Fee, etc. The deductions will appear separately on the employee's payslip.
To access this utility go to Process ICON no. 1 OR Employees > Add/Amend employee details > Deductions Tab
ALLOWABLE DEDUCTIONS (PENSIONS)
IMPORTANT NOTE
PENSIONS
Since 2003, employers in Ireland are obliged to provide access to at least one standard PRSA for all their employees.
EMPLOYERS REQUIREMENTS
As a result of the Pensions Act (amendment) 2002, you will be required to set up at least one Standard PRSA (personal retirement savings account) arrangement for your employees, if:
§ You operate a pension scheme but you restrict who can join the scheme or you have imposed a waiting period to join the scheme for more than 6 months
§ You operate a pension scheme for your employees, but the scheme does not offer any facility to make any additional voluntary contributions (AVC's) to top up their retirement benefits
YOU WILL ALSO BE REQUIRED BY LAW TO:
§ Notify your excluded employees of their right to contribute to a PRSA by payroll deduction
§ For employees who wish to contribute, deduct employee contributions from wages and remit to their PRSA
§ Allow institutions and intermediaries, who promote PRSA, worksite access to your excluded employees for the purpose of taking out a standard PRSA
§ Allow excluded employees reasonable paid leave to enable them to make arrangements to take out a Standard PRSA
§ Remit to the institution operating PRSA employees' contributions deducted within 21 days of the end of the month in which the deduction is made. You can't make any deduction from these contributions; you must pay them over in full to the PRSA's
§ Notify your employees each month of the PRSA contributions deducted from their wages and any contributions you make to their PRSAs during the previous month. This can be done through the employees' payslips
PENSION RELIEF
Since the 01st January 2011 employee PRSI relief on pension contributions has been abolished, however, PAYE tax relief, subject to Net Relevant Earnings thresholds will continue.
Pension contributions do not attract relief from Universal Social Charge.
AGE % of Net relevant earnings
Under 30 years of age 15%
30-39 years of age 20%
40-49% years of age 25%
50 to 54 years of age 30%
55 to 59 years of age 35%
60 years and over 40%
ENTER A PENSION DEDUCTION BY AMOUNT
Ø Choose a scheme reference number from the drop down menu or type in a new reference number
Scheme reference is contained in policy documents and is usually no greater than 10 characters in length.
Ø Enter amount for employee's contribution in the box provided
Ø Enter amount for employer's contribution in the box provided
Ø Indicate the Pension type by ticking the appropriate box
RBS: Retirement Benefit Scheme
PRSA: Pension Retirement Savings Account
RAC: Retirement Annuity Contract
Ø The total amount entered will be deducted from the employees weekly, fortnightly or monthly gross pay as appropriate.
ENTER A PERCENTAGE PENSION
Ø Choose a scheme reference/name/number from the drop down menu or type in a new reference/name/number
Scheme reference is contained in policy documents and is usually no greater than 10 characters in length.
Ø Enter employee's percentage of gross salary to be deducted in the box provided
Ø Enter employer's percentage of gross salary to be deducted in the box provided
Ø Tick the percentage tick box - this indicates that amounts entered are percentages
Ø Indicate the Pension type by ticking the appropriate box :
RBS: Retirement Benefit Scheme
PRSA: Pension Retirement Savings Account
RAC: Retirement Annuity Contract
Ø The percentages entered will be applied to the employee's weekly, fortnightly or monthly gross pay as appropriate.
ENTER A CONTRIBUTION TO A SECOND PENSION SCHEME
Ø Click Additional
Ø Under the section Other scheme, choose a scheme reference from the drop down menu or type in new reference/name/number
- Scheme reference is contained in policy documents and is usually no greater than 10 characters in length.
Ø Enter pension amount under Ordinary or AVC
- Please note that the percentage basis of pension deduction will no longer work for this employee if amounts are input in this section.
Ø Click Update to save the second pension scheme
ORDINARY
This refers to RBS/PRSA/RAC contributions made to a second scheme in addition to the main scheme. The employee and employer (if applicable) contributions are entered as the weekly, fortnightly or monthly contribution amounts. The employee amount entered is deducted from their weekly, fortnightly or monthly gross pay as appropriate.
AVC
This refers to any Additional Voluntary Contributions (AVC) made by the employee to a Pension scheme.
ENTER AVC CONTRIBUTIONS
An AVC is any Additional Voluntary Contributions made by the employee to a Pension scheme. As a result of the Pensions Act (Amendment) 2002, you will be required to facilitate an employee who wishes to make an additional voluntary contribution (AVCs) to their pension.
Ø Enter AVC amount
Ø Click Update
Ø Remember to zeroise the AVC amount in the next pay period
ENTER CWPS (CONSTRUCTION WORKERS PENSION SCHEME)
Building firms are legally required under the Registered Employment Agreement (Construction Industry Pensions Assurance & Sick Pay) to register all qualifying employees in a compliant pension scheme.
CWPS provides a pension, sick pay and a death-in-service benefit in line with legal requirements. The death-in-service payment applies whether the death occurs at the workplace or outside working hours.
Further information can be found on www.cwps.ie
Ø Click CWPS
Ø Click Yes if you wish to use the default CWPS deductions for 2015
Ø Review default CWPS deductions carefully. You can amend amounts if necessary.
Ø Click Update when finished
ENTER NECI (National Electrical Contractors Ireland) PENSION
NECI provides a pension, life assurance and income protection in line with legal requirements. A Short-term Accident Payment is also covered in the NECI pension plan.
More information can be found at www.neci.ie
Ø Click NECI?
Ø Review default NECI deductions carefully. You can amend amounts if necessary.
Ø Click YES when finished
PENSION RELATED DEDUCTION (PRD) / Pension Levy
For the purposes of setting up the Pension Related Deduction within Thesaurus Payroll Manager the deduction will be known as Pension Levy throughout the program.
The Pension Levy must be entered into the “Other Allowable Deduction” field as indicated.
To enter the Pension Levy simply type “Pension Levy” into this dedicated narrative field, once you start to type the narrative the program will automatically complete the field for you.
Please note that you must use this default narrative of “Pension Levy”, otherwise the deduction will not be recognised as the Pension Levy deduction by the program and will not be applied accordingly.
The amount of the deduction to be applied need not be entered within this “Additions / Deductions” screen as the program will automatically apply the published rates and bands to the employee’s earnings as they fluctuate. Therefore the nominal amount can be left as zero.
The amount of Pension Levy deduction will be shown within the Employee record under the Payslips menu, Weekly Input / Monthly Input>
The Pension Levy deduction will automatically calculate in line with the rates and bands and this automated deduction amount will be shown.
To view the calculation of the Pension Levy simply double click on the amount. A breakdown of earnings across each band and with the applicable rate will be shown.
Adjust the Pension Levy (override)
Should you disagree with the automated calculation of the Pension Levy calculated by the program then simply type the desired deduction over the automated deduction amount. This manually entered amount will now be applied to the employee’s salary.
NON ALLOWABLE DEDUCTIONS (UNION FEES, LOAN)
Ø Enter description of Non allowable deductions i.e. union fees, loan etc.
Ø Enter Amount
If this is a once off deduction, remember to revert amount entered to zero in the next pay period.
PARKING LEVY
Thesaurus Payroll Manager has been pre-programmed to recognise a deduction as a Parking Levy deduction once the user uses the designated fields within the program.
Do not set up the parking levy deduction in advance of the announced commencement date, as once the deduction is set up it will start to deduct from the employee salary in the following pay period.
Under the last option of “Non-Allowable Deductions” any of the deduction boxes can be used.
In order for the deduction to be recognised as the specific parking levy deduction, so that it is reflected correctly on all Revenue returns, e.g. P30, P35 and P60, simply start to type “Parking Levy” within the narrative field.
Once this is done the program will automatically complete the narrative to read “Parking Levy”.
Enter the amount of levy which should be deducted from the employee’s salary in line with the remaining pay periods for the tax year.
The amount entered will be deducted from the employee’s salary in each pay period going forward and will be returned on the P30, P35 and P60 accordingly.
For further information in relation to the Car Parking Levy please refer to the Revenue publication.
