We manage payrolls and employ staff on behalf of clients. Irish mandatory social security is only 10.75% of gross remuneration. It is one of the lowest in Western Europe. However private health and private pensions are frequently required by candidates and clients.
We were asked to investigate providing private health care for the employee of a client. We were not very successful in obtaining help from private insurance brokers (most only dealt with the biggest, well known, most expensive provider) all of whom suggested we do research online and approach the health providers directly. Even then we established that these companies would only set up a company plan for 5 or more employees. In this instance, the employee applied for private health insurance in his private capacity and the client pays the premiums every month via the payroll with a Gross up portion to account for the additional tax that the “benefit” attracts.
If an employee is a member of an approved private health insurance scheme, he or she may get a tax credit. This tax credit is generally granted directly by the insurance company. The premium will be reduced by the amount of the tax credit so the tax credit may hardly be noticed. This is known as Tax Relief at Source (TRS). However, in some limited situations TRS does not apply, for example, where an employer pays the medical insurance premiums on behalf of an employee. This is treated as a Benefit in Kind and tax, and employee and employer social security (called PRSI and USC) are due on the total amount.