The Chartered Institute of Personnel and Development has warned that job losses will stem from the abolition of the ceiling on employer PRSI payments.
The abolition of the employers’ PRSI ceiling took effect on 6th April 2001.
Based on tax strategy Group figures from the Department of Finance, the CIPD said that 102,000 people will be affected by the abolition of the PRSI ceiling with employers in the IT and financial services industries most likely to suffer. The group also said that informal research revealed that in the majority of IT companies at least 30 per cent of the workforce would earn above IEP36,000 whereas in the financial services industries, up to 40 per cent of the workforce would have annual earnings in excess of IEP36,000.
‘Many human resource managers have spoken to me of their fears that the move to abolish the PRSI ceiling is, in fact, going to turn out to be a tax on the employment of highly skilled knowledge based workers’ said Michael McDonnell, director of the CIPD in Ireland. ‘It is imperative to the future success of our economy that these sectors must be declared exempt from this additional tax.’
Although the CIPD said it broadly welcomed many of the budgetary measures, it called for a compete overhaul of the PRSI system and suggested that in the short term, that those industries such as IT and financial services where a large number of employees earn well above the IEP36,600 cap, should be declared exempt.
Addressing the Finance Dublin Second Annual Conference in March of this year Mary Harney indicated that the Government would make some concessions on employer PRSI. However this is unlikely to come before the next budget - and there was no indication that a ceiling would be reintroduced. |
