Notes for first year income chapter

1. Income
Income is something earned (money coming into the household). The main types of
income are regular income, additional income and benefits-in-kind (perks).
Regular income is income that a person receives every week or month e.g. pocket
money, wages, salary or unemployment benefit.
Additional income is extra income a person receives occasionally e.g. overtime,
Christmas bonus or interest on savings.
Benefit-in-kind or “perks” are extra benefits given by an employer. Official perks are
ones that the employer knows about e.g. company car, medical insurance or
travelling expenses. Unofficial perks are ones that the employer does not know about
e.g. personal phone calls or pens taken home by staff.
Payslip
When you are employed you get a payslip. A payslip shows your name, the period
you are getting paid for, gross pay, deductions and the net pay.
Sample Payslip
Name
David Whyte
Period
(Week 1)
01/01/200807/01/2008
Gross Pay
Deductions
Basic Overtime Total PAYE PRSI Savings
€600
€100
€70
0
€120
€20
€50
Net Pay
VHI
€1
0
€500
Gross Pay is your total income before any deductions have been taken.
Gross Pay = Basic Pay + Overtime + Commission + Bonus.
Net Pay is your take-home pay.
Net Pay = Gross Pay – Deductions.
Statutory Deductions are items that must be taken away from your gross pay. They
are:
• PAYE (Pay As You Earn) – Income tax. The Government uses this money to run
the country e.g. build hospitals & schools and pay doctors’ & teachers’ wages.
• PRSI (Pay Related Social Insurance) – money paid towards future state paid
social welfare benefits e.g. unemployment benefit, old-age pension and maternity
benefit.

2. Non-Statutory Deductions (Voluntary Deductions) are items you choose to take
away from your gross pay. Examples are:
• Savings, VHI (Voluntary Health Insurance) and Trade Union subscription.
Tax Credits – every person who works gets tax credits which reduce the amount of
tax you have to pay.
Question 1.
Fill in the following information into Mary Jones’ Payslip: Basic Pay €700, Overtime
€100, PAYE €120, PRSI €30, Savings €50 and VHI €25.
Payslip - Mary Jones
Name
Period
(Week 1)
01/01/200807/01/2008
Mary Jones
Gross Pay
Deductions
Basic Overtime Total PAYE PRSI Savings
Net Pay
VHI
Question 2.
Fill in the following information into Joe Soaps’ Payslip: Basic Pay €600, Overtime
€150, PAYE €110, PRSI €28, Trade Union €10 and VHI €25.
Payslip - Joe Soap
Name
Period
Joe Soap
(Week 1)
01/01/200807/01/2008
Gross Pay
Basic Overtime
Deductions
Trade
Total PAYE PRSI Union
Net Pay
VHI