Taxes Consolidation Act 1997 section 112A

Taxation of certain perquisites

Section 112A deals with the taxation of medical insurance and long-term care insurance premiums paid by an employer on behalf of an employee as a benefit-in-kind, and the corresponding charge on the employer to recover the benefit of tax relief at source.

• Where an employer pays health insurance or long-term care insurance premiums as part of an employee's remuneration, the employee is taxable on the gross premium amount as a benefit-in-kind, with a standard-rate tax credit given in the tax calculation.
• The employer must pay Revenue an amount equal to 20% of the gross premium (less any age-related tax credit, if applicable) to offset the benefit the employer gained from paying the reduced (net of tax relief) premium to the insurer.
• The employer is allowed a tax deduction for both the net premium paid to the insurer and the amount paid to Revenue, so the total deduction equals the gross premium.
• The provisions of section 238(3) to (6), dealing with the accounting for and payment of annual payments, apply with necessary modifications to the employer's tax charge under this section.