Tax Relief on Private Medical Insurance
Should your employees be claiming Tax Relief on Private Medical Insurance?
If you are paying Private Medical Insurance on behalf of your employees, then the Gross Cost of the Medical Insurance is taxable as a Benefit In Kind. Your employees can apply to Revenue for Tax Relief on the Private Medical Insurance at the standard rate of 20%.
Where the employer pays the insurance premium on behalf of the employee the net premium payable to the Health Care Provider is 80% of the gross premium. The employer then must pay the remaining 20% direct to the Revenue when paying their Preliminary Tax payment to the Collector General. The sum of both payments is the Gross Cost on which the employee is taxed as a Beneft in Kind.
Where the employer is paying medical insurance on behalf of the employee, this is treated as a Benefit In Kind. The value of the BIK is equal to the gross premium payable for the employee. Employees are entitled to claim tax relief from Revenue at the rate of 20% of the gross premium. This is given in their annual tax credits.
Employees paying medical insurance through their employer or direct to the Insurance company will receive tax relief at source, as the insurance premium is reduced by the standard rate of tax, currently 20%. The net premium payable by an employee is 80% of the gross premium.
If your organisation pays Private Health Contributions for your employees, just inform the PayrollTeam@paycheckplus.ie who will be happy to take care of the calculations for you. For further details about our Outsource Payroll Services, Call 01 9059400 today.