Introduction

If you provide any non-cash benefit, such as a company car, for your employee, this is a benefit in kind. This can also be called notional pay or BIK.

These benefits are treated as taxable income because they have a monetary value. BIKs are liable for PAYE, PRSI and USC.

The way notional pay is dealt with in CloudPay is as follows:

1. Monetary value of the benefit is determined either by using the BIK Utility, or entered directly into the elements grid in the Employee screen
2. The monetary value is added onto the gross pay
3. The gross pay is taxed (PAYE, PRSI and USC)
4. Once the tax has been calculated, the Monetary value is taken off again as you do not want to actually pay this employee this amount.

For example, if a benefit is valued at €500 per month and the employee is also paid €2000 a month, then the PAYE, USC and PRSI is calculated on €2500. The employee then receives €2000 less tax (PAYE, USC and PRSI)

More information about Benefit In Kind can be found here: https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/index.aspx