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Name and explain the two compulsory deductions taken from a person's gross income - Leaving Cert Home Economics - Question 11 - 2005
Question 11
Name and explain the two compulsory deductions taken from a person's gross income. (i) (ii)
Worked Solution & Example Answer:Name and explain the two compulsory deductions taken from a person's gross income - Leaving Cert Home Economics - Question 11 - 2005
Step 1
Pay As You Earn (PAYE)
Answer
PAYE refers to the income tax deduction made by an individual's employer before they receive their pay. This sum is then passed on to the Revenue Commissioners (Government Department). The funds collected are used by the government to run the country and provide public services.
Step 2
Pay Related Social Insurance (PRSI)
Answer
PRSI is a deduction based on the type of job and is calculated as a percentage of the employee's earnings. The amount is shared between the employer and the employee. This deduction helps to fund social welfare benefits, pensions, and various health services, contributing to programs that support employment training and financial assistance for apprentices.