If you've being incorrectly applying BIK for an employee, and wish to reverse it, here's how.
The 'opposite' to benefit in kind is an non-taxable element.
For example:
Month 1 - BIK incorrectly added. More tax is paid when it shouldn't be
Code:
Tax PRSI USC
Salary 4000 Ticked Ticked Ticked
BIK 1000 Ticked Ticked Ticked
---------------------------------------
Gross Pay 5000
(Taxed on 5000)
Month 2 - Refund of BIK - correction made to error in Month 1
Code:
Tax PRSI USC
Salary 3000 Ticked Ticked Ticked
BIK refund 1000 Unticked Unticked unticked
---------------------------------------------
Gross Pay 3000
(Taxed on 3000)
Total for month 1 and 2
Gross Pay 8000
(Taxed on 8000)
So the solution is to:
1. Add up all the incorrect BIK from prior payments (from 1 January)
2. Subtract the amount in step one from the taxable salary amount
3. Add a new element, and untick Tax, PRSI and USC, for the amount in step one.
This will mean that the gross pay and tax will be the same as if you never deducted the BIK, and the end of year reports should also be correct.
Login
Register
FAQ
Search
