The world of Payroll can be a confusing one. With lots of terms, acronyms and specialised terminology, making sense of it all can be a challenge. That’s where this glossary comes into play as it will help you to understand the different terms and their explanations, essentially everything you need to be aware of before you run payroll.
AEO – An Attachment of Earnings Order, is where a creditor applies to the court for an order to allow them to take funds from an employees wage.
AVC – Additional Voluntary Contribution – a voluntary contribution made by an employee to a pension scheme, in addition to any regular contributions provided for in the contract of employment.
BIK – Benefit In Kind a benefit from an employer in a form other than a monetary payment (e.g. car, health insurance payment)
Gross Pay – The employee’s total pay including the notional value of BIK before any deductions are made by the employer.
Income Tax – The income tax year is based on the calendar year 1st January to 31st December.
LPT – Local Property Tax – A self-assessed tax charged on the market value of residential properties.
Nett Pay – The amount of pay remaining for issuance to an employee after deductions have been taken from the individual’s gross pay. This is the amount paid to each employee on payday
PAYE – Pay As You Earn – The tax payable on income earned as an employee. Employers are obliged to calculate and deduct PAYE due from the wages or salaries of their employees through the payroll system as they are paid.
Payslip – Online or printed summary of an employee’s gross-to-net earnings.
PPSN – Personal Public Service Number – Issued by an individual’s local Social and Family Affairs Office.
PRD – Pension Related Deduction – A deduction from the remuneration of pensionable public servants.
PRSA – Personal Retirement Savings Account – A long-term personal pension plan, designed to let individuals save for retirement in a flexible way.
PRSI – Pay Related Social Insurance – Tax payable by both employer and employee administered by the Department of Social & Family Affairs. The rate of PRSI payable depends on the personal circumstances of the individual and the number of earnings.
ROS – Revenue On-Line System – A means to conduct transactions with the Revenue through the internet.
SRCOP – Standard Rate Cut-Off Point – The amount of income that is liable to tax at the standard rate of 20%. Any income more than the SRCOP will be responsible to tax at a higher rate, currently 41%.
Taxable Pay – An employee’s gross pay less certain deductions approved by Revenue which are allowable for tax purposes, such as contributions to a Revenue approved Pension Scheme, PHI Scheme or deductions under an approved Salary Sacrifice Arrangement.
USC – The Universal Social Charge is a tax on income. It is charged on gross income before any pension contributions.