Payroll Terminology Quiz: Gross Pay, Basic Pay, Tax Bands

Definitions of Pay

• Gross Pay: The total amount earned by an employee before any deductions like taxes or social security contributions.
• Basic Pay: The minimum salary an employee receives, excluding bonuses, overtime, or additional benefits.

Taxation in Ireland

• Tax Bands: Structures that determine the tax rate applied to an individual's income, aiding in progressive taxation where higher earnings are taxed at higher rates.
• Flat Rate Expenses: Fixed amounts that employees can claim for certain expenses that are incurred as part of their job, not requiring receipts but based on specified guidelines.
• PAYE (Pay As You Earn): A tax system where income tax is deducted from an employee's salary by the employer before it is paid out, ensuring timely tax payments to the government.

Tax Management

• Tax Calendar: A schedule that outlines important tax deadlines in Ireland, including filing dates and payment due dates, helping taxpayers stay compliant with their obligations.

Employment and Benefits

• Superannuation: Refers to the pension scheme for employees, which is typically funded by contributions from both the employee and employer, providing financial support during retirement.
• Public Sector Employee: Individuals employed by government entities or agencies, including teachers, police officers, and civil servants.

Personal Identification and Benefits

• PPS (Personal Public Service) Number: A unique identification number used for accessing social welfare benefits and public services in Ireland, essential for tax and social security matters.
• Benefit in Kind: Non-cash perks provided to employees, such as company cars or accommodation, that are considered part of their taxable income.

Holiday and Social Insurance

• Holiday Pay Calculations: Determined based on an employee's average earnings over a specified period, ensuring fair compensation during time off work.
• PRSI (Pay Related Social Insurance): A system of social insurance contributions that fund various social welfare benefits in Ireland, including pensions, unemployment benefits, and maternity leave.