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PAYE Modernisation

Have you heard about PAYE Modernisation?

The new PAYE reporting system, Real Time Reporting (RTR), will go live on the 1st January 2019. This will be a big change for, and will bring significant challenges to, employers.

The objective of Real Time Reporting is that Revenue, employers and employees will have the most up to date information available as regards what wages are being paid, when they are being paid and that the correct amount of tax is deducted each pay period.

For employers, the introduction of RTR will necessitate changes in their current payroll practices which are currently based on an end of year reporting obligation. Employers will now need to focus on the quality and accuracy of the information that will be provided to Revenue on each pay day.

Employees will also have access to their tax records online, through MyAccount, and will be aware of all details that the employers report to Revenue in Real Time on their behalf.

From 1 January 2019, payroll will need to go through the following steps prior to paying employees (i.e. prior to each pay date):

  1. Obtain a Revenue Payment Notification (“RPN”) from Revenue for that pay period, which will contain relevant details on how to tax each employee for the pay period in question,
  2. Process payments to employees
  3. Report payments made, the payment date and tax deducted (or repayable) to Revenue for each employee
  4. Reconcile / accept the statement from revenue showing the total payroll deductions by the 14th of the following month
  5. Pay the associated tax to Revenue by the 23rd of the following  month

The above steps will replace the current P30 reporting, which was only required on a cumulative basis for the company rather than per employee. The P35 filing will also no longer be required.

It is important to note that it will not be possible to correct errors/omissions occurring throughout the year and that the reporting process must be correct for each pay period, otherwise penalties may apply (under current legislation, penalties can apply to each separate reporting failure).

Employers - It's time to review your processes.

Employers need to review their overall payroll processes and take steps over the next few months to introduce the changes required to ensure that the transition is as seamless as possible.

We’re here to help!

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Hartley Business Park, Carrick on Shannon, Co. Leitrim Eircode N41 F9X8
Phone: +353 (0) 71 967 1524
Website: www.moranmcnamara.ie
Email: info@moranmcnamara.ie

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