An unnamed Dublin Hospital was found overpaying their employees on sick leave by €200 a week because of confusion in the payroll system. The blame was said to be the payroll system which inaccurately calculated sick and maternity leave and did not take the employees benefits into account. This error has cost the hospital approximately €400,000 a year from overpaying absent staff and also paying too much in tax and social welfare contributions.

    The truth of the matter is that tax calculations are a complex process to manage. Large hospitals may be able to swallow €400,000 a year in overpayment but a small business can’t afford to make casual mistakes when it comes to their payroll or any financial calculations for that matter. As Eamonn Corcoran, Chief Executive of Irish Payroll Association (Ipass) stated in response to this mishap, ‘the state has serious problems in the public sector in operating PRSI, PAYE, the universal social charge and pension deductions and levies with the result that some public bodies are paying over the odds. He continued to state that the people responsible for managing PRSI and PAYE deductions generally receive little or no training.

    The truth is many small and mid-size Irish businesses are relying on employees to wear multiple hats and manage multiple areas of the business. In many cases owners are acting as the payroll and HR department due to cutbacks. Time spent on trying to figure out tax deductions for employees and understanding benefits and ways in which employees should be paid is time that could be spent focusing on the business and having these areas managed by experts.

    Here is a simple guide that helps employers better understand how to calculate USC.

    Employer’s Guide to Universal Social Charge

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