Benefit in Kind on Health Insurance
Does your employer pay for your health insurance? Interested in how BIK on this might work? It’s nothing to worry about - when an employer is paying for all or a percentage of their employees’ health insurance, there is a Benefit in Kind tax liability that occurs. The employee themselves are liable for tax on the amount that their employer pays on their behalf.
For many people the BIK cost is a relatively small cost compared to the benefit and peace of mind they enjoy from having their health insurance covered.
Most benefits from employment that are provided in addition to your salary are subject to income tax and the Revenue Commissioners are responsible for the collection of taxes here in Ireland. In the majority of cases your employer will automatically deduct the tax, PRSI and USC to be collected, based on the gross value of all benefits-in-kind at source. This means that it will come out of your salary automatically.
For some people within group employers schemes it may be worth checking if you are receiving your Tax Relief at Source (TRS) to offset these BIK costs and, if not, to ensure you file your annual tax return to reclaim.
If in any doubt you should contact your employer's accounts department, the Revenue Commissioners website or your own accountant.
If you are an existing Laya Member you can login to our dedicated member’s area here. If you’d like to join Laya you can compare various laya healthcare plans on our site here.