Monthly direct debit

Employers' Income Tax

Employers' Income Tax which includes:

  • Income Tax
  • Pay Related Social Insurance (PRSI)
  • Universal Social Charge (USC)
  • Local Property Tax (LPT) Deduction at Source.

Revenue collects direct debit payments for Employers' Income Tax on the third last working day of the month. You cannot select a different deduction date.

Direct debit is collected in arrears. This means that the payment to cover the December liability, is taken from your account in January. 

Following the introduction of PAYE Modernisation on 1 January 2019, you will no longer need to submit a P35 for tax years 2019 onwards.

You will calculate and report your employees’ pay and deductions as they are being paid.

For more information on please see the section on PAYE Modernisation.

Employers' Income Tax returns

You will need to submit a P35 return on 15 February 2019 for the 2018 tax year. This
will be the final year for which a P35 return will be required to be submitted.

For the 2019 tax year and subsequent years, you will report your employees’ pay and deductions to Revenue as they are being paid. Revenue will issue you with a monthly statement based on your submissions. This will be the fifth day of the following month and will show a summary of the total liability. The statement will be treated as the return if no amendments or corrections are made before the return due date.

Setting up an employers' Income Tax fixed direct debit

To be eligible to set up a fixed direct debit for employers’ Income Tax you must:

  • file and pay any outstanding returns and taxes
  • have monthly Employers’ Income Tax liabilities of €25,000 or less
  • apply through  Revenue Online Service (ROS)
  • ensure that your monthly payments are large enough to cover your annual Employers’ Income Tax amount.

Revenue can charge you interest if there is an underpayment.

Allocation of fixed direct debit payments

Your fixed direct debit payment should cover the amount of tax submitted on the payroll notification. Where the payment is too low Revenue will allocate the next fixed direct debit payment to the period.

Revenue can charge you interest if there is an underpayment. We allocate the fixed direct debit payments to the oldest liability first. This will reduce the amount of interest you could be charged.

Amending an Employers' Income Tax direct debit

You can change your bank details for your direct debit on ROS.

With fixed direct debits you can increase the amount you pay monthly at any stage during the year on ROS. You can also decrease the monthly amount, but only up to a maximum of three times in the year. Following a change, the system will update the value of your direct debits for the remaining months of your annual period plus one month.

You can choose to suspend up to three direct debit payments during the annual period. You must ensure that after amending or suspending the direct debit, you will still meet your expected annual employers’ Income Tax amount.

Cancel an Employers’ Income Tax direct debit

You can cancel your direct debit at any stage through ROS. Once the direct debit is cancelled, the system will resume issuing returns based on your normal pay and file pattern. 

Missed or unpaid Employers’ Income Tax fixed direct debit payments

Your bank may return your payment as ‘unpaid’. If it does we will send a letter to inform you that the payment was unsuccessful.

You can pay the missed payment:

  • through ROS
  • by debit or credit card.

You should replace the cancelled direct debit payment before the next debit is due from your account. Revenue will allocate the next direct debit to the period of the cancelled payment if you have not replaced it.

We may remove you from the direct debit scheme when direct debits are unpaid.

Next: PAYE Modernisation - introduction of variable direct debit scheme