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How to calculate your net fortnightly pay - Health Service … - convert hourly wage to salary
National PayrollGuide to Calculating Gross to Net Fortnightly Pay2019-381635266065Table of ContentsPageGlossary of Terms3Pay Periods for Fortnightly Paid Staff3Calculating Gross to Net Pay4Gross Pay/Basic Pay per Period Calculation4Superannuation5Additional Superannuation Contribution 6Universal Social Charge 8Contact Details for Revenue 8Local Property Tax 9TAX/PAYE 9PRSI 12Appendices Examples of CalculationsPRSI Class D 14PRSI Class A 15Glossary of Terms:AVCs - Additional Voluntary Superannuation ContributionsEarnings – all pay types e.g. salary, premia, overtime, allowances etc.Gross Pay/Payments - Total earnings excluding Mileage and ExpensesGross Taxable Pay – Earnings subject to tax less (Superannuation + ASC (was PRD) and all tax relievable deductions e.g. AVCs + Cornmarket Life Assurance Element of Income Continuance Plan etc)Gross Pensionable Pay – earnings on which superannuation is payableOAP – Contributory Old Age Pension – the rate was €243.30 per week which increases to €248.30 from 26/03/19PRD – Pension Related Deductions (Pension Levy)ASC – Additional Superannuation ContributionsSuperannuation – deductions towards pension schemePensionable Payments – payment types that are subject to superannuationPRSI – Pay Related Social InsuranceRPN – Revenue Personal NotificationUSC – Universal Social ChargeSRCOP – Standard Rate Cut Off PointNational Minimum wage is €9.80 gross per working hour in respect of hours worked on or after 1st January 2019.DOH – Department of HealthPSSA – Public Service Stability Agreement 2018-2020Pay Periods For Fortnightly Paid Staff Employees who are paid fortnightly on a Thursday are paid 11 days in arrears. To work out which period you are being paid for, count back 11 days from the pay date and the pay period is the previous 14 days i.e. Monday to Sunday. Example MAY 2019MTWTFSS12345678910111213141516171819202122 232322425262728293031Pay date:Thursday 30th May 2019Pay Period: 6th May to 20th May 2019 (14 days)Calculating Gross to Net PayGross Pay less Statutory and Voluntary Deductions = Net PayStatutory Deductions Voluntary DeductionsPAYE (tax)VHIPRSICredit UnionASC (Additional Superannuation Contributions)Trade UnionSuperannuation (Pension)Life AssuranceUSC (Universal Social charge)AVCs etc.Gross Pay/Basic Pay per Period CalculationBasic pay per period is derived from the annual salary and calculated on the number of days in the year (whilst incorporating the leap year) and multiplied by the number of days in the payroll period E.g. Staff Nurse on Annual Salary of €42,000, fortnightly period basic pay is:42,000/365.25*14=€1,609.86 per fortnightEmployees on less than whole time hours is calculated in the same way on their pro-rata annual salaryHourly Rate Calculation Hourly rate is calculated on the annual salary, divided by the number of days in the year, multiplied by the number of days in the week and divided by the whole time hours of your grade E.g. Staff Nurse with hours for the grade of 39 €42,000/365.25*7/39=€20.6392 per hourThe hourly rate for employees on less than whole time hours is calculated the sameInclusion of Allowances in Hourly Rate CalculationsSome specific allowances are included in the calculation of hourly rate by adding in the annual value of the allowance with the annual salary and calculating the hourly rate as above.When calculating Gross Pay you need your annual salary and hourly profile (full time hours for your grade e.g. 36, 37 or 39 hours) to determine the hourly rate.Annual Salary ÷ 365.25 x 7 ÷ hourly profile = hourly rateExampleStaff Nurse on Annual Salary of €42,000 = €42,000 ÷ 365.25 x 7 ÷ 39 = €20.639 hourly rateAny Allowances should also be included in the calculation of Gross Pay. These are calculated as follows:Annual Allowance ÷ 365.25 x 7 ÷ hourly profile x hours workedExampleStaff Nurse in receipt of Specialist Qualification Allowance working 78 hours€2791 ÷ 365.25 x 7 ÷ 39 x 78 = €106.98On Call/Call Outs etc. are calculated as per DOH Consolidated rates and should also be included to arrive at Gross Pay.The table below sets out how most payments are calculated:Payment TypePayment CalculationBasic Salary(annual salary)Hours Worked x Hourly RateSunday PremiumHours Worked x Hourly RateNight Duty PremiumHours Worked x Hourly Rate ÷ 4 Unsocial HoursHours Worked x Hourly Rate ÷ 6Overtime at Flat RateHours Worked x Hourly Rate Overtime at Time Plus one halfHours Worked x Hourly Rate x 1.5Overtime at Double TimeHours Worked x Hourly Rate x 2Public Holiday PremiumHours Worked x Hourly RateSuperannuation Superannuation varies depending on your contract of employment. Superannuation is only deducted from payments that are deemed pensionable. Detailed below some payment types:Gross Payments that are PensionableGross Payments that are Non-PensionableBasic Salary(annual salary)OvertimeSpecialist Qualification AllowanceCall OutsLocation AllowanceKey Holders AllowancePremia Payments (Saturdays, Sundays Nights etc.)Living Out AllowanceCardiac AllowanceOn Call AllowancesSecure Unit AllowanceOfficers employed prior to 5th April 1995 (Class D)Gross Pensionable Pay x 6.5%Officers employed post 5th April 1995(excluding New Entrants after 1st January 2013)Gross Pensionable Pay x 3% plusGross Pensionable Pay less (OAP x 4*) x 3.5% * OAP rate is pro rata to hours workedNon Officers employed prior to 2005Gross Pensionable Pay x 1.5% plusGross Pensionable Pay less (OAP x 4*) x 5% * OAP rate is pro rata to hours workedNew Entrants after 1st January 2013Gross Pensionable Pay x 3% plusGross Pensionable Pay less (OAP x 4*) x 3.5% * OAP rate is pro rata to hours workedAdditional Superannuation Contribution (ASC)From 1st January 2019 onwards, Additional Superannuation Contribution (ASC) will replace the pension-related deduction (PRD) which will cease at the end of 2018. While PRD was based on taxable remuneration, ASC is based on pensionable remuneration only. Whereas PRD was a temporary emergency measure introduced back in 2009, ASC is a permanent contribution in respect of pensionable remuneration. Whereas PRD was a temporary emergency measure back in 2009, ASC is a permanent contribution in respect of pensionable remuneration.ASC will apply only to individuals who are in receipt of pensionable pay and applies to a person who:is a member of a public service pension scheme or receives a payment-in-lieuis entitled to an ex-gratia retirement gratuity (annual or lump sum) on retirementIn accordance with Section 31 of the Act, ASC will not apply to a public servant who is:a member of a public service scheme that is a defined contribution scheme i.e. has the same meaning as it has in the Pensions Act 1990a CORE member under the North/South Pension Scheme as defined in Section 28 of the Acta NILGOSC member under the North/South Pension Scheme as defined in Section 28 of the Actan individual who is employed in a non-pensionable capacity e.g. a retired public servant who is a member of an interview board or a Returning Officer etc.Unlike PRD, ASC will only apply to a person who is a member of a public service pension scheme, receives a payment-in-lieu of pension or is entitled to a retirement gratuity on retirement. Thus, for example, those who are retained in a non-pensionable position under Department of Public Expenditure and Reform Circular 21/2017 etc. will not be liable for ASC when it is introduced. Note: A person who is engaged on a “contract for services” i.e. a fee-paid basis is not subject to ASC unless there is a pension element to the fee set. Employers should be able to identify any and all such individuals. ASC is only chargeable on pensionable remuneration. Pensionable remuneration includes:Basic Pay (excluding non-pensionable overtime) due to the public servant in respect of that period, andAllowances, Emoluments and Premium pay (or its equivalent) which are treated as pensionable pay.Pensionable allowances, emoluments and premium pay shall attract ASC on an “as and when paid” basis. This includes regular rostered overtime (which has been approved by the appropriate authority as being pensionable) and acting up allowances. i.e. Allowances, such as regular rostered overtime, are liable for ASC “as and when paid” where those allowances have the potential to be included in pensionable remuneration of time of retirement under the last 3 years/Best 3 in 10 rulesASC ThresholdsThere are 3 different sets of thresholds and rates depending on the pension scheme/arrangement applicable to an individual:Single Public Service Pension Scheme (“Single Scheme”) – in general, new entrants to the Public Servants on or after 1 January 2013Standard Accrual members of Pre-2013 Public Service Pension Schemes (pre-existing schemes)Fast Accrual members of Pre-2013 Public Service Pension Schemes (pre-existing schemes)It should be noted that the Act provides for different ASC regimes for “covered” and “non-covered” public servants for the years 2019 and 2020. Currently there are no non-covered public servants i.e. where an employee or group of employees decide to step outside the terms of the PSSA then they shall be deemed to be a “non-covered public servant” for the purposes of the Act.CoveredNon-CoveredASC will attract tax relief only. There will be no PRSI relief and no USC relief. Please note confirmation that the Public Service Superannuation (Age of Retirement) Act 2018 includes a section providing that Salary Sacrifice in respect of “travel passes” and the “bike-to-work” scheme is not subject to ASC.? Public Servants will pay PRSI on the ASC which replaces PRD from 01.01.2019. portion of their salaries.Universal Social Charge (USC)This was introduced from 1st January 2011 and is chargeable on all gross pay. It is not chargeable on any Department of Employment Affairs and Social Protection (DEASP) payments e.g. Illness benefit. If your income is greater than the exemption limit (€13,000 in 2019), you pay USC on your full income.From 01.01.2019 the standard rates for those earning in excess of €13,000 p.a. are:AnnualFortnightly%First €12,012 gross pay €462.000.5%Next €7,862 gross pay €302.002%Next €50,170 gross pay €1,929.0024.5%BalanceBalance8%USC is calculated on a cumulative basis, similar to PAYE. Revenue will provide the rates applicable to each person. The standard rates are as above but if you have another income, the rates will be divided between employments. Should you have a full medical card, please inform Revenue of this. Medical card holders and individuals aged 70 years and over whose aggregate income does not exceed €60,000 will pay a maximum rate of 2%.The rate of 8% USC will continue to apply under the Emergency Basis. You will receive notice of your rates of USC on your Tax Credit Certificate. Any queries with regard to the rate of USC applied to your payroll should be directed to Revenue.To calculate USC as accurately as possible take Gross Pay minus ‘illness benefit’, ‘maternity benefit’, ‘cycle to work’ and ‘travel Pass’ payments.A calculation of USC due is included in your End of Year Statement (P21). You can request this in myAccount on the Revenue website.Contact Details for RevenuePay as you Earn (PAYE) Please note that the quickest and easiest way for you to manage your tax affairs is to use the Revenue online services.Phone (+353) 1 738 3636 Call charges may vary depending on your telephone provider's service contract. Telephone opening hours: 09.30 to 16.00 Monday to Friday.Email: Please use the secure 'MyEnquiries' service available in myAccount or ROS?Postal addressOffice of the Revenue CommissionersCity Centre/North City PAYE District9/15 Upper O'Connell StreetDublin 1D01 F9C1Public Office - Appointments If you are unable to use Revenue online services, please call the number below in the link of the office you wish to visit (between 9:30am and 4pm Monday to Friday) to make an appointment. https://www.revenue.ie/en/contact-us/non-resident-customer-service-contacts/pay-as-you-earn-paye-non-resident.aspx LPT (Local Property Tax)Deduction of LPT commenced in 2013 for those employees who have requested the deduction from their pay. The details are sent directly by Revenue and the deduction is applied in accordance with the instructions received. All queries in relation to LPT value should be directed to Revenue in the first instance. TAX/PAYEPAYE Modernisation will come into effect from 1st January 2019. Under the new system, employees’ pay and deductions will be reported to Revenue in real time. The Pay As You Earn (PAYE) system is a tax collection system which requires an employer to deduct income tax from an employee’s wages each time he or she is paid and remit it to Revenue on behalf of the employee. PRSI (Pay Related Social Insurance), USC (Universal Social Charge) and if instructed by Revenue LPT (Local Property Tax) are also collected under the PAYE system. The introduction of PAYE Modernisation on 1st January 2019 represents one of the most significant changes to the PAYE system since its introduction in 1960 which requires employers to submit payroll information to Revenue on or before the date the employee is paid.https://www.revenue.ie/en/jobs-and-pensions/paye-modernisation-for-employees/index.aspxhttps://www.revenue.ie/en/jobs-and-pensions/starting-your-first-job/index.aspxThe PAYE system applies to you if you have income from employment or a pension that is taxed at source. Employers will be required to request a Revenue Payroll Notification (RPN) from Revenue before paying employees. An RPN will be the new name for a tax credit certificate (commonly known as a P2C) which will contain the necessary information to deduct tax, USC and LPT from employees. The RPN is provided by Revenue and will determine the tax credits and the standard rate cut off point – this will be reflected on your payslip. First time employees should register for MyAccount. MyAccount is a single on-line access point for Revenue services There has been no change to tax rates for 2019. The standard rate will remain at 20% and the higher rate at 40%. An individual will pay tax at the standard rate on an amount of income equal to his/her SRCOP, with any excess income liable to tax at the higher rate of 40%.There are three methods of calculation:Cumulative – this applies to the majority of staff (it works by calculating the income liability arising on a person’s income from the start of the income tax year (Jan) to date, (not each payment in isolation) taking account of the employee’s total earnings to date and the accumulated fortnightly tax credits and SRCOP)Week 1 Basis – depends on personal circumstances(the pay for each pay period is dealt with in isolation and no account is taken of pay, tax credits, SRCOP, tax deducted in previous fortnights)Emergency – this applies when no Tax Credits have been received from Revenue employer.Cumulative Tax is calculated as follows:Gross pay less (Superannuation + ASC + AVCs + Cornmarket Life Assurance Element of Income Continuance Plan) = Gross Taxable Pay (this figure is used as part of the tax calculation)Weekly standard rate cut off point x 2 = fortnightly standard cut off point (this equals the amount of your taxable pay @ 20%)If fortnightly taxable pay is less than your fortnightly standard cut off point, then all of your taxable income is taxed @ 20%If fortnightly taxable pay is greater than fortnightly standard rate cut off, then the excess income is taxed @ 40%Calculation of tax is thereforefortnightly standard rate cut off x 20% (a)Remainder of taxable pay x 40% (b)(a) plus (b) less (weekly tax credit x 2) = tax payableTo calculate PAYE as accurately as possible take Gross Pay minus ‘ASC’, ‘Pension’, ‘AVC’s’, ‘Spouses and Children Arrears’, ‘non-taxable sick benefit’, ‘Cycle to work’ and ‘Travel Pass’Easy ExampleJohn earns €500.00 per week, has a tax credit of €29.21 and a standard cut-off point of €389.00.How is his tax calculated?Gross Taxable Pay €500.00Tax on €389@20% = €77.80Tax on €111@40% = €44.40Gross Tax = €122.20 Less Tax Credit -€ 29.21Tax Liability € 92.99(If John paid pension of €50.00 per week then the gross pay above should be shown as €450.00)Emergency TaxThe emergency tax operates when:Your employer has not received a notification of determination of tax credits and standard rate cut off point (RPN) for you for the current year, orFORTNIGHTLYEffective from 1 Jan 2019Where employee provides a PPS Number SRCOP TAX CREDITWeek 1-Week 41,330.00 per F/N @20%Balance @ 40%Nil Week 5 onwardsNilNilWhere employee does not provide PPS Number SRCOP TAX CREDITAll @ 40%NilNilIf you do not supply your employer with your PPS Number, your employer must deduct tax at the higher rate (40%) on your gross pay (less superannuation). No tax credits are due.How to get off Emergency TaxOn-line service – Access to the service is available in myAccount (selecting ‘Add Job or Pensions’ in PAYE Services) (Preferred Option)Phone the Revenue Commissioners in your region Have the following information at hand:Personal Public Service number (PPSN)Start date of new jobFrequency of payment. i.e. Fortnightly/MonthlyGroup & Personnel/Employee Number – e.g. 022/073276YEmployer’s PAYE Register Number (see for your region below)Employer Registration System – Revenue maintain a register of employers – unique to each employer.HBS Finance – Payroll Services, HSE Regions are as follows:RegionEmployers Reg. No.RegionEmployers Reg. No.Eastern Region0043024GPortiuncula0024042BMidlands0002000JSouth-East0027010DMid-West0030888USouth-West0007497WNorth-East0072958DWest0024042BNorth-West0036210MLink from Revenue website:https://www.revenue.ie/en/jobs-and-pensions/emergency-tax/index.aspx PRSI (Pay Related Social Insurance)PRSI is payable on all gross pay. An employee’s PRSI sub class can vary from pay date to pay date as it is based on each fortnight’s earnings.Permanent Officers employed prior to 5th April 1995 are generally Class D. All other staff are generally Class A. Please refer to your payslip to determine your class.To determine your PRSI class divide Full Gross Pay by 2 and this will determine which PRSI subclass you fall into. Detailed below the various classes, sub classes and percentage deductions:Weekly Income BandPRSI Sub ClassHow much of weekly Income is liable% PayableClass A staffUp to €37.99JOAll0€ 38.00 - €352.00AOAll0€352.01 - €386.00**AXAll4.00€386.01 - €424.00**ALAll4.00More than €424.00A1All4.00** PRSI Credit appliesPermanent Officers employed prior to 5th April 1995 Class DUp to €352.00DOAll0€352.01 - €500.00DXAll0.90More than €500.00D1Up to €1443 inclusiveBalance0.904.00**PRSI Credits – for earnings between €352.01 and €424.00, the maximum weekly PRSI credit is reduced by one sixth of earnings in excess of €352.01.Class J normally relates to people with reckonable earnings of less than €38 a week (from all employments). However, the following employees are insurable at Class J, regardless of earnings: employees aged 66 or over and people in subsidiary employment.Class M relates to people with a nil contribution liability (such as employees under age 16 and persons in receipt of occupational pensions)There are no annual earnings ceiling for PRSI for employees.Class A PRSI CreditFor gross earnings between €352.01 and €424.00 in a week, the 4% PRSI charge will be reduced by a new PRSI Credit. PRSI credit applies to sub-classes AX and AL and on earnings up to €424.The amount of PRSI Credit depends on gross weekly earnings. At gross weekly earnings of €352.01, the maximum PRSI Credit of €12.00 per week applies.For earnings between €352.01 and €424.00 (sub-classes AX and AL), the maximum weekly PRSI credit of €12.00, is reduced by one sixth of earnings in excess of €352.01.The calculation of the new PRSI charge for Class A, with gross weekly earnings between €352.01 and €424.00, involves 3 separate calculations:Calculate the PRSI CreditCalculate the PRSI charge at 4%Deduct the PRSI Credit from the 4% PRSI ChargeThe following example shows how to calculate the PRSI Credit and the new PRSI charge, for gross fortnightly earnings of €754.00(€377.00 per week):Calculate the PRSI CreditMaximum PRSI Credit per fortnight€24.001/6th of earnings in excess of €704.02(754.00-704.02 = 49.98/6)-€8.34Reduced PRSI Credit€15.66Calculate the PRSI charge at 4%€30.16Deduct the Reduced PRSI Credit€15.662019 fortnightly PRSI charge€14.50Note: The calculation of the PRSI charge, and accordingly the PRSI credit is based on fortnightly earnings.Examples of Gross to Net Fortnightly calculations:Appendix 1Examples of Gross to Net Fortnightly calculations:Appendix 2The new OAP (€248.30) abatement rate is used in the calculation - OAP Rate is currently €243.30 per week which increases to €248.30 from 26/03/19
How do I change an employee from hourly to salary? From the Employees menu, select Employee Center. Double click the name of the employee. On the payroll info tab, select Salary. Once done, click on OK.
