Does your employer pay for all or part of you (or your
family’s) medical insurance? If so
you could be entitled to a tax refund.
Tax relief for medical insurance paid is granted at source
through the Tax Relief at Source (TRS) system. Meaning subscribers pay a
reduced premium equal to 80% of the gross amount of the insurance premium. This reduction is the same as giving tax relief at the
standard rate of tax (20%). No further claim is required to be made to Revenue.
However an employee whose medical premiums have been paid
by their employer will not have been entitled to TRS and will be entitled to
claim this back in their annual tax return.
The following examples will illustrate the relief due:
Example 1 – Employer Pays the Full Insurance Premium
Gross Premium €2,000
TRS @ 20% €400
Net Premium €1,600
As the employee would not have benefited from the TRS
given on this insurance premium they would be entitled to reclaim back €400.
The gross premium would have been treated as a Benefit in
Kind to the employee and would be subject to PAYE, PRSI and USC.
Example 2 – Employer Pays part of the Insurance Premium
Gross Premium €2,000 Employer Pays €1,000 and Employee Pays €1,000
TRS @ 20% €400
When the Employee paid the €1,000 they would have received TRS of €200 resulting in only a net payment to be made of €800.
However they would have received no TRS on the Employer Contribution and would therefore be entitled to a refund of €200.
How to Claim
If you have not previously claimed this tax before you can put in a claim for the past four years if applicable.
