Annual Payroll Update 2024

This article is crafted to provide valuable insights and updates on essential payroll updates. Whether you’re a payroll client or a curious reader seeking knowledge about payroll management in Ireland, this ebook is your trusted resource.

Each topic is carefully curated to equip you with the knowledge and tools to streamline payroll processes, maintain compliance, and effectively support your employees.

We understand that payroll management can sometimes be complex, and you may have questions or specific challenges not covered in this guide. Whether you’re a client seeking personalised assistance or further guidance, please know we’re here to support you.

From the 1st of January 2024, employers must submit an enhanced report to Revenue’s Online Service (ROS). This report will contain information about an employee’s business expenses to ensure employers comply with payroll regulations and report all non-taxable benefits to the Revenue Commissioners.

The following information must be submitted to Revenue, per employee and director, in receipt of these expenses:

• Travel and subsistence
• Site based employees
• Emergency travel
• Eating on site
• Small Benefits Exemption Scheme
• Work-from-home allowance

Revenue will provide a facility on ROS to enable employers to submit, amend and correct enhanced reporting data.

Revenue will implement a phased approach for reporting expenses to give businesses sufficient time to prepare. This means businesses will not be required to report all expenses simultaneously. Instead, Revenue will gradually announce which expenses must be reported and when. This approach will allow businesses to adjust their reporting processes in a manageable and efficient way. You should consult with a payroll specialist to understand the enhanced requirements for your business.

Stay Informed: Evolving implementation and procedure details

It’s important to highlight that Revenue is still rolling out Enhanced Reporting Requirements (ERR). The exact procedure is still being developed, whether it will be integrated into Revenue’s Online System (ROS) or require updates in payroll software.

Rest assured, our team of payroll experts is diligently monitoring these changes. We are committed to keeping our clients well-informed. Once the procedure is crystal clear, we will promptly communicate all the necessary details and provide expert assistance at every step. Your payroll needs are our priority, and we are here to help you navigate these transitions smoothly.

What is Benefit-in-Kind?

A benefit-in-kind (BIK) is any non-cash benefit companies can give employees—sometimes called notional pay, fringe benefits or perks. BIK can include cars, health insurance and subscriptions.

As of the 1st of January 2023, the tax employees will pay for a company car, known as Benefit in Kind (BIK), will be calculated based on the car’s CO2 emissions and annual kilometres driven.

These changes are happening because the government wants to reduce pollution by 2030.

For electric cars, there is a reduction in the amount that will be taxed under BIK. To calculate how much tax must paid on an electric company car, you must determine the car value when it was brand new and then subtract a specific amount outlined by Revenue. These reductions are €35,000 in 2023, 2024, and 2025, €20,000 in 2026, and €10,000 in 2027, and there is no reduction from 2028 onwards.

If this subtraction makes the car’s value zero, you won’t have to pay any tax. But if there’s still some value left after subtracting, you’ll have to pay regular tax rates on that remaining value.

For all company cars, including electric cars, depending on the CO2 emissions per KM driven, there’s an additional reduction of €10,000 from the Original Market Value (OMV) until December 2024.

These changes might make things costlier for employers and employees, especially if the company car has high emissions. So, employers should consider the cars they provide their employees in light of these rules. It’s a good idea to review your car choices carefully.

Advantages of choosing an electric car for business

• Cost savings: Electric cars are 70% cheaper than traditional petrol or diesel cars. There are also 50% toll reductions for battery EVs and 25% for plug-in hybrid cars. Battery electric cars have the lowest tax band for motor tax.
• Tax incentives: The Irish Government will provide up to €10,000 to help with the purchase price and a grant to install a home charger unit. Check out the Sustainable Entergy Authority of Ireland (SEAI) and the Government website for information on tax credits, grants, and deductions.
• Reduced emissions: Electric cars produce zero tailpipe emissions, which is environmentally friendly and can enhance your company’s image as a socially responsible and sustainable business. This can be particularly appealing to eco-conscious customers and partners.
• Lower operating costs: Electric cars benefit from reduced operating costs, including lower charging and maintenance expenses. Charging can often be done at the workplace, further reducing downtime.

As of the 1st of January 2023, employees have the Right to three days’ sick pay a year. This is called Statutory Sick Pay (SSP) and is the legal minimum sick pay. The company must pay sick pay at 70% of the employee’s normal salary up to a maximum of €110 a day.

If the company has a sick pay scheme in place that is more generous than the Statutory Sick Pay Scheme, they are to provide this to the employee.

To qualify for sick pay, the employee must be with the company for at least 13 weeks and have a certificate from a General Practitioner (GP) as unable to work.

Real-world scenarios

1. Alice is an employee of All Seasons Consultancy, and her daily wage is €100 per day. Alice is off sick for one day with a General Practitioner’s (GP) note. All Seasons Consultancy has no sick pay scheme, so the company must pay Jenny €70 (70%) Statutory Sick Pay for the sick day.
2. Brendan is an employee of Belly Laughs Production, and his daily wage is €200. Brendan is off sick for one day with a GP note. Belly Laughs Production Company does not have a sick pay scheme, so the company must pay Brendan the max Statutory Sick Pay of €110 for the day.
3. Chris is an employee of Creative Solutions, and their daily wage is €200. Chris is off sick for one day with a GP note. Creative Solutions has a sick pay scheme in place in his contract, which states that Chris is entitled to full sick pay, so the company must pay Chris €200 for the day.

Upcoming changes to Statutory Sick Pay

The entitlement to Statutory Sick Pay is being phased in over four years:

• 2023 – 3 days covered
• 2024 – 5 days covered
• 2025 – 7 days covered
• 2026 – 10 days covered

Remember: Employees can take sick days as consecutive or non-consecutive days, and the sick pay year is the calendar year, so it runs from the 1st of January to the 31st of December.

Statutory Sick Pay (SSP): What records do employers need to keep?

• The period of employment of each employee who avails of SSP.
• The dates and times of SSP and employees who availed.
• How much SSP was paid to the employees.

Remember: Records need to be kept for 4 years.

Medical care

For employees: An employee has the right to take unpaid leave for a maximum of 5 days within 12 months to care for a person who requires significant care or support due to a serious medical condition. This includes parents, grandparents, spouses, civil partners, and others.

For employers: Employers must consider a request from an employee under the flexible working arrangement legislation. However, you’re not obliged to agree to the request. The employer can request the employee’s evidence, such as medical certificates.

Domestic violence leave

For employees: Those suffering or at risk of domestic violence will be entitled to five days of paid leave in 12 months.

For employers: The employee must inform the employer as soon as possible that they are taking this leave.

The Right to request flexible working arrangements for caring purposes

For employees: A request may be made by a parent to provide care for a child, a spouse, cohabitant, parent, grandparent, sibling, or someone who resides with the employee and requires “significant care or support for a serious medical reason”.

For employers: An employee must work for the employer for six months before flexible working arrangements can commence. The employer must consider both their needs and the needs of employees when considering a request.

The Right to request remote working for all employees

For employees: The employee must request the reasons for this and the working hours schedule in writing.

For employers: The employee must be with the company six months before making the request. The request needs to be submitted eight weeks before the start date. The employer must reply within four weeks of the start date. If refusing, the employer must provide grounds for why.

Breastfeeding breaks

For employees: Women can take one hour of paid leave per day to breastfeed or express milk in the workplace, which has increased to 104 weeks, effectively up to two years.

For employers: Employers should establish a clear and confidential communication channel with employees who require breastfeeding breaks.

In late 2024 or early 2025, Revenue will release the Automatic Enrolment Retirement Savings System, a significant development in retirement planning.

Once this system is in place, employees and their employers must contribute a set percentage of their total salary to their employee’s retirement savings. Additionally, the government will donate a percentage of the gross salary to help with these savings.

Revenue has yet to confirm the precise mechanics of how auto-enrolment will function, including the specifics of contributions, and the information is subject to change as Revenue releases more information.

What to expect

Using Revenue’s latest information, here is how much will be added to employees’ pension contributions:

Years	Employee contribution	Employer contribution	Government contribution
1 – 3	1.5%	1.5%	0.5%
4 – 6	3%	3%	1%
7 – 9	4.5%	4.5%	1.5%
10	6%	6%	2%

Who will be automatically enrolled?

Eligible employees:

• Aged between 23-60 years
• Earning a minimum €20,000 gross per annum across all employments
• Without a current occupational pension

Exclusions:

• Self-employed
• Non-earning
• Those currently paying into an acceptable occupational pension scheme

Stay Informed: Exact procedure to be announced

Our team is closely monitoring these details to keep our clients informed. We are committed to providing expert guidance regarding the Automatic Enrolment Retirement Savings System at every step. Once Revenue clarifies the operational aspects of the system, we will swiftly communicate all pertinent information. We aim to ensure a seamless transition into this new system.