BIK Preferential Loan

BENEFIT IN KIND - PREFERENTIAL LOANS

IT IS IMPORTANT TO READ THE FOLLOWING NOTES CAREFULLY BEFORE PROCEEDING.

IMPORTANT NOTES ON BENEFIT IN KIND

PAYE, USC & PRSI must be operated by employers in respect of the taxable value of most benefits in kind and other non-cash benefits provided by them to their employees. The amount to be taken into account is referred to as "notional pay".

SMALL NON-CASH BENEFITS NOT EXCEEDING €250

Where an employer provides a small non-cash benefit (that is a benefit not exceeding €250) PAYE, USC & PRSI need not be applied to that benefit. No more than one such benefit given to an employee in a tax year will qualify for such treatment. Where a benefit exceeds €250 in value the full value of the benefit is subjected to PAYE, USC & PRSI.

BENEFIT IN KIND ON PREFERENTIAL LOANS

What is a preferential loan?

A 'preferential loan' is a loan made by an employer to an employee, or the spouse of an employee, in respect of which no interest is payable or the interest is payable at a rate lower than the Revenue specified rate.

Specified Rates : 4% Qualifying Home Loans

13.5% All other Loans

PAYE, USC & PRSI is applied to the difference (interest rate saving) between the interest applied by the employer in the tax year and the amount of interest which would have been payable in the tax year if the loan had been subject to the specified rate.

BENEFIT IN KIND ON LOANS

To access this utility go to Employees > Update employee benefits > Click Loans

Ø Enter Amount of Preferential Loan

The amount entered should be the original loan amount if it was made this tax year or the loan amount outstanding at the start of the tax year.

If the period of the loan is for less than one tax year, you should enter the average outstanding for the portion of this tax year that the loan is active.

Ø Enter Interest rate being charged

Ø Enter Start date of loan

Ø Enter End date of loan if the loan expires before 31st December

Ø Click Update file and show calculation of notional pay

* Please note: The loan benefit will be added to the employee's gross income each pay period to ensure that the correct PAYE , USC & PRSI are charged.

SUBSEQUENT LOANS

*Please note: The original loan should NOT be removed. Simply enter the end date of original loan and start the new loan in the section provided.

Ø Enter End date of original loan

Ø Enter Amount of new Loan

The amount entered would normally be the original loan if it was made this tax year or the loan amount outstanding at the start of the tax year.

If the period of the loan is for less than one tax year, you should enter the average outstanding for the portion of this tax year that the loan is active.

Ø Enter Interest rate being charged

Ø Enter Start date of loan

Ø Enter End date of loan if the loan expires before 31st December

Ø Click Update file and show calculation of notional pay

Need help? Support is available at 01 8352074 or thesauruspayrollsupport@brightsg.com.

General

Help 2015 Budget - Employer Summary Ordering for next year Payroll Upgrades Payroll Calendar Calculator Import Hours from Text or CSV File Full periodic CSV Import Pension Related Deduction (PRD) or Pension Levy Computational Anomaly Directors Fees Share Based Remuneration NECI

Glossary of Terms

English Cantonese Czech Hungarian Latvian Lithuanian Mandarin Polish Portuguese Romanian Russian

Payroll Deductions

Universal Social Charge Universal Social Charge - Calculations USC Exempt Status v USC Exempt Income PAYE PRSI Week One or Cumulative Basis Emergency Basis Local Property Tax (LPT)

Getting started