The Irish Payroll System and PAYE Modernisation
PAYE Modernisation was started as the new payroll system in Ireland in January 2019.
Employees including directors will no longer receive forms like P60s or P45s.
Payroll will now be completed online and there is a filing every payday, allowing employees to see pay and tax in real time on Revenue’s website through the employee's myAccount portal.
What changes did PAYE modernisation bring?
- Employers have to report staff taxes and pay to Revenue on or before their pay day.
- The Revenue Payroll Notification (RPN) gives employers the information they need to deduct tax from their employees. This is replacing the current P2C tax credit certificate and has to be downloaded each pay day
- Every employee in a business will now have a reference number. This is called The Employment Identifier and is in the payroll submission fpor each pay day and the RPN. This number will help identify anyone who has begun and ended a job in the same year with the same company. It will also help identify anyone who has multiple employments, in a business so that their allowances can be spread across their jobs.
- An Earning and Deductions Certificate will be introduced. This is replacing current filing forms like P60s, P45s and P30s. You can also find this certificate if you set up your myAccount on Revenue’s website.
Is there anything I need to do as an employee?
As an employee, you should set up My Account on Revenue’s website. My Account shows you the tax credits available to you, your Earning and Deduction Certificate and information about your tax. It’s not necessary to create an account but it will be useful for you.
What do I need to know about PAYE modernisation as an employer?
Every employer needs to register on the Revenue Online Service ( ROS ) on Revenue.ie. You must report your employee’s income on ROS. You can also view your PAYE bills through ROS.
Reporting to revenue
On the day of, or before, each employee is paid, you need to report;
- how much they are being paid ( gross salary )
- the date they are being paid
- the amount of PAYE, PRSI and USC deducted
If you use payroll software, there are two ways to report to Revenue;
- Direct Payroll Reporting - your payroll software will share employee information with Revenue.
- ROS Payroll Reporting - you can upload files created on your payroll software to ROS.
You can talk to your software provider and accountant about the new ways to report with software.
If you don’t use a software, you can file a form on ROS using Revenue Payroll Notifications (RPNs).
Do I need to make changes?
You will only need to make changes for PAYE Modernisation if you;
Have Employees On Flexible Salaries
You will now need to know what your employees will be paid before they are paid. That means that if your employees are paid hourly, you will need to know how many hours they will work during the pay period and report the resulting pay for the period to Revenue.
Report Your Payroll Manually
If you have been filing paper returns, you will need to file online from now on. If you dont want to file online yourself, you can get a payroll provider like OSA McQuillan to look after it for you.
What can I do as an employer?
1. Keep your Payroll Files Up To Date
- Revenue will do on-site checks to ensure your payroll is up-to-date and has been reported.
2. You can set up a direct debit with Revenue
- This allows Revenue to automatically take tax payments from your account, cutting down on some of your work. You can talk to your accountant or payroll provider about this option.
3. Set up MyAccount
- So you can report your employees’ income and so they can view their income and taxes.
4. Accounting software
- Make sure all employees are set up correctly on your accounting software before they are due to be paid.