Revenue eBrief No. 093/19
03 May 2019
PAYE Modernisation Update - employers and payroll agents
PAYE Modernisation Update: May 2019
The modernised system of real-time PAYE reporting came into operation on 1 January 2019. The majority of employers have seamlessly transitioned to the new reporting arrangements and to date, some 161,000 employers have successfully submitted over 2 million payroll submissions in respect of some 2.6 million employees.
A new online service will be available shortly which will allow all employees who are subject to PAYE to view their payroll information as submitted to Revenue by their employers. This service will be available through the myAccount facility on the Revenue website at www.revenue.ie.
Payroll Information Received
Prior to the new reporting arrangements, Revenue only received a breakdown of pay and tax information from employers in relation to their employees after the end of the tax year via the P35 return. The change to a real-time reporting environment enables us to improve our overall service to PAYE taxpayers as well as providing us with greater insight into employers’ payroll operations.
For example, by using the data provided by employers we can accurately analyse the pay and tax details of employees throughout the year to ensure they receive their correct entitlements and pay the right amount of tax at the right time. We can also quickly identify discrepancies in pay and tax details and engage with employers as necessary.
The experience of the first four months of the new reporting arrangements, while being very satisfactory overall, has highlighted some recurring issues with payroll submissions, including:
- Employers mistakenly sending the payroll data to Revenue more than once, which incorrectly inflates the declared liability and raises the possibility of unnecessary Revenue interventions.
- Employers incorrectly creating duplicate employments for the same employee leading to an over-statement of liability to Revenue.
- Payroll submissions, or parts of payroll submissions, failing the validation process. In such circumstances, the deductions for any invalid payslips are not included in the employer’s Monthly Statement thereby incorrectly reducing the declared liability. Errors detected by the validation process can be viewed using the ‘View Payroll’ facility in ROS.
- Employers ceasing employments in error by incorrectly including cessation dates for employees in payroll submissions.
- Employers failing to apply the most up to date Revenue Payroll Notification (RPN) when running payroll.
- Employees being taxed on the emergency tax basis where an RPN is available.
- Incorrect operation of emergency tax e.g. employee reported with emergency tax, but no tax deducted by the employer.
- ‘Gross Pay’ shown as less than ‘Pay for Income Tax’ and/or ‘Pay for USC’.
- No USC deducted where the employee is not USC exempt.
- USC deducted where the employee is USC exempt.
- Employers paying their tax liability twice in error e.g. by setting up both a ROS Debit Instruction and Variable Direct Debit for the same payment period.
Where such errors, or other errors, arise, employers should immediately rectify them to ensure they do not feature in future payrolls. Early action also reduces the possibility of a Revenue intervention.
Employers should note that when employees receive online access to their pay and tax details through the MyAccount facility, any discrepancies between payroll details on an employee’s payslip and those reported to Revenue will be visible. Such discrepancies could result in employees seeking clarification from their employer. It is therefore very much in every employer’s interest to ensure that the data submitted to Revenue is accurate and in line with the employee’s payslip record.
There is a range of information available on the Revenue website to assist employers including:
If employers are experiencing any difficulties complying with their obligations or have any questions regarding PAYE Modernisation they should contact the Employer Helpline on 01-7383638 for assistance.
Penalties for breaches of the PAYE Regulations
Revenue will continue to assist any employer who is experiencing genuine difficulty in complying with the new PAYE requirements. However, employers who fail to engage with Revenue or who persistently breach the PAYE Regulations are liable to a €4,000 penalty per offence under section 987 of the Taxes Consolidation Act 1997.