New changes are being made to the Irish payroll system, but how will they affect you? If you’re an employer you will need to know and apply the changes. If you’re an employee, you will no longer receive filing forms like P60s or P45s.
The new payroll system will also have a new name; PAYE Modernisation, or Real Time Planning. The changes being made mean payroll is moving into the 21st century. From January 2019, payroll will be completed online, allowing you to see your pay and tax in real time on Revenue’s website.
So, What Are The Changes Being Made?
- You will need to report your employee’s taxes and pay to Revenue on or before their pay day.
- The new Revenue Payroll Notification (RPN) will give employers the information they need to deduct tax from their employees. This will replace the current P2C tax credit certificate.
- Every employee in a business will now have a unique number. This will be called The Employment Identifier and will be included in the payroll submission and RPN. This number will help identify anyone who has ended and begun employment in the same year with the same company. It will also help distinguish anyone who has multiple employment in a business.
- An Earning and Deductions Certificate will be introduced. This will replace current filing forms like P60s, P45s and P30s. You will also be able to find this certificate in My Account on Revenue’s website.
Is There Anything I Will Need To Do As An Employee?
As an employee, you should set up My Account on Revenue’s website. My Account will show 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 As An Employer?
Reporting to Revenue
On the day of, or before, each employee is paid, you will need to report;
- the amount they are being paid,
- the date they are being paid and
- the amount of tax deducted.
If you use payroll software, there will be two ways to report to Revenue;
- Direct Payroll Reporting – This means your payroll software will automatically 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 will be able to complete a form on ROS using Revenue Payroll Notifications (RPNs).
Do I Need To Make Changes Before January?
All businesses will need to be ready for PAYE Modernisation before January 2019. But, you will only need to make changes before then if;
You Have Employees On Flexible Salaries
You will now need to know what your employees will be paid before they are paid. So, if your employees are paid hourly, you will need to work out how many hours they will work during the pay period and report that to Revenue.
You Report Your Payroll Manually
If you have been reporting manually, you will need to move online. If this is not an option for you, you can outsource to a reputable company.
What Should I Do Before January?
1. Upload An Up-To-Date List Of Employees on ROS
- Revenue requires an up-to-date list of all your employees and their PPS numbers.
2. Keep Your Payroll Files Up-To-Date
- Revenue will be doing on-site checks to ensure your payroll is up-to-date and has been reported.
3. You Can Set Up A Direct Debit With Revenue
- This will allow Revenue to automatically remove tax payments from your account, cutting down on some of your work. You can speak to your accountant or payroll provider about this option.
4. Set Up MyAccount
- So you can report your employees’ income and so they can view their income and taxes.
5. Contact Your Payroll Software Provider
- Your software provider should contact you about PAYE Modernisation. If they don’t, make sure you contact them and ask if they are prepared.
If you are an employee you should set up My Account to keep tabs of your taxes.
If you are an employer you will have to report employee’s taxes and pay to Revenue on or before the day they are paid. You will also need to set up My Account on Revenue before January, 2019.